How Much Is A Master’s Degree & How Do Postgraduate Loans Work?
If you’re looking to further your studies, read on to find out the cost of a master’s degree and if loans are an option.
Postgraduate degrees are becoming a more popular choice after you graduate your undergrad. HESA data shows that there are 64.6% more students studying for their master’s in 2022/23 compared to 10 years ago.
But when the average undergraduate leaves uni with £44,940 worth of student loans, it might make you pause before hitting ‘apply’ on a postgraduate course. Less is said about the cost of master’s degrees, but it’s worth shouting about. While you may choose to study past your undergraduate because you simply enjoy education, for some, it could be a requirement to get into their chosen field.
We’re breaking down the costs involved in a master’s degree, and the help you could get financially, so you can make an informed decision on your future studies.
In this article:
- Why is there no maintenance loan for master’s degrees?
- How much is a master’s degree in the UK?
- How much money can you get from a postgraduate loan?
- Will my postgraduate loan cover my master’s degree?
- What interest rate will I pay on a postgraduate loan?
- How will I be paid my postgraduate loan?
- Postgraduate loan repayments
- How to apply for a postgraduate loan
- Other ways to fund your master’s degree
Why is there no maintenance loan for master’s?
Unlike your undergraduate degree, there’s no means-tested maintenance loan for master’s degrees. Loans are available for postgraduate degrees, but they’re not means-tested, and their purpose is to cover tuition fees rather than your living costs. The maximum loan you can get is £12,471 for courses that start on or after 1st August 2024.
The difference between a master’s degree is that nearly a quarter of students who study at postgrad level will do it part-time. This means you’ll have more options to work alongside your studying, which will help towards living costs. 82% of undergraduate students study full time, and often away from home, so the maintenance loan can help cover the cost of undergraduate accommodation.
So while this is great when you’re studying for your first degree (besides you know, the giant student loan), you won’t be entitled to a maintenance loan if you decide to do a master’s degree.
How much is a master’s degree in the UK?
The cost of a postgraduate degree varies wildly depending on the course and university you choose to study at. These can range from £4,900 a year to over £100,000, so doing your research is key if you need to consider the cost.
If you’re an international student, you’ll be looking at an even more expensive bill with costs starting from around £9,000, according to the British Council.
There’s a big difference in the cost between types of postgraduate degrees, as a classroom-based MA will generally be a cheaper course than a lab-based postgrad, like an MSc. Clinical postgrads or MBAs (business-based degrees) are more expensive still. These are usually due to the more extensive (and expensive!) equipment and specialist resources needed on these courses.
So the course you study can be a big factor in the overall cost of your postgraduate degree.
However, it’s also worth thinking about the investment of your time (and money) into your education and what you’re hoping to achieve. The London Business School offers the most prestigious MBA program in the UK, at an eye-watering price of £115,000 for a 15-21 month course. But 90% of their graduates in 2023 accepted a job offer within three months with a mean salary of £99,333 (plus £50,514 in compensation/bonus). So, could it all be worth it?
These are all things to consider when looking at funding your master’s degree.
How much money can you get from a postgraduate loan?
As we mentioned, there isn’t a means-tested maintenance loan for postgraduate courses. But, the Student Loan Company does offer a postgraduate loan, which they introduced in 2016 to help fund further education.
| If your course started… | The amount of loan you’ll receive is |
|---|---|
| on or after 1 August 2024 | £12,471 |
| between 1 August 2023 and 31 July 2024 | £12,167 |
| between 1 August 2022 and 31 July 2023 | £11,836 |
You can apply for a postgraduate loan here.
Am I eligible for a postgraduate loan?
You’ll need to make sure you’re eligible before you apply. This means:
- You have to be under 60 at the start of your course to be eligible
- It has to be your first master’s degree – or a higher qualification
- It can only be a maximum of a four-year course, which is at least 50% intensity
- You won’t be able to receive certain bursaries as well as a loan, which include the healthcare NHS bursary, social work bursary or Scottish bursary.
- You have to be able to gain a full master’s qualification worth 180 credits. Important as postgrad diplomas are normally only 120 or 60 credits.
- You have to be living in England or Wales and be a UK national who has lived in the UK for three years before your course starts. If you’re an EU national, you can also qualify if you’ve lived in the EU for three years and are studying at an English university and living in England when your course starts.
Your postgraduate loan could impact any benefits like Universal Credit. Loans are classed as income, as it comes straight into your bank account and you don’t technically have to spend it on your course fees.
If you do receive any kind of benefits, then it’s worth speaking to someone at the DWP before you apply, to see how you could be impacted.
Will my postgraduate loan cover my master’s degree?
As we’ve mentioned, the range of how much you’ll pay for your master’s degree can vary wildly.
You may be able to cover the entire cost of your master’s degree using your postgraduate loan, or even have a little extra to spare. In which case, result! Why not see if you can save and spread the money so it acts as a miniature maintenance loan while you’re studying?
Unfortunately, the postgraduate loan might also barely touch the sides of your tuition fees (see: London Business School). If that’s going to be the case, then it’s worth looking into the other options you could explore.
Resources like The Scholarship Hub are a great place to start, with incredible information about applications for scholarships and bursaries. We’ve also written about all the ways you can actually study a master’s degree for free in the UK.
What’s the interest rate on postgraduate loans?
Ahh interest, the bane of our existence and one of the ways that we just cannot seem to shift student loan debt.
Similarly to how you pay your undergraduate student loan back, you’ll start repaying your master’s degree loan the April after you graduate. But you’ll start accruing interest as soon as the Student Loan Company pay your first instalment of your loan.
The interest rate is currently set at 3% plus the RPI inflation rate. The RPI inflation rate is set once a year in September based on the previous March. This March 2024 RPI inflation rate was 4.3%. So for September 2024 until 31 August 2025, interest rates for postgraduate loans will be 7.3%.
How is your loan paid?
Another difference from your undergraduate student loan is that the sum will be paid directly to your bank account (not your university/higher education institution). So you’ll be directly responsible for paying your chosen place of study for your course fees.
The loan is paid in three instalments throughout the year. For part-time study over several years, the loan is split evenly across each year of your course.
If you do receive your loan in equal instalments over two or four years, then it’ll be up to you to work out how to make sure you have enough each term. There are a few ways of doing this, including:
- Set up a savings account to gain interest on your loan
- Pop it in a separate pot if you have an app like Monzo so that it’s not in your direct access (we’re saving you from temptation…)
- Speaking to your university to see if they have any payment schemes that will allow you to pay it front rather than spread it out
Postgraduate loan repayments
As we mentioned, postgraduate loan repayments operate similarly to undergraduate repayments. The key thing to remember is that you’ll only start to pay it back when you earn above the repayment threshold.
What’s also important to remember is that the government can change the terms of postgraduate loans at any given time. We’ve seen countless changes to student finance over the years, resulting in all kinds of different plans.
At the time of writing, all of our information is correct, and we keep it updated regularly. But it’s ALWAYS important to cross-reference with the government website and even Student Loans Company so you know you have the most up-to-date information.
What are the repayment thresholds?
The repayment threshold for paying back postgraduate loans is set at £21,000 for England, and Wales, and has been frozen at that threshold since 2019.
If you earn above £21,000 then you’ll start repaying your loan the April after you graduate, whatever time of year your course finished. So that works out as £1,750 a month or £403 a week.
Your repayments will be actually lower than undergraduates (see, it’s not all doom and gloom!). The amount you repay is 6% for England and Wales. And remember, you’ll only pay 6% on everything you earn ABOVE the threshold.
For example, if you earn £25,000, then your repayments would be taken from the £4,000 above the threshold limit. That means that if at any point, you’ve started repaying your loan, but your circumstances changed, like you lost your job or had a big salary cut, then your repayments would adjust too.
How do I pay my postgraduate loan back?
Repayments come directly from your payslip. So you won’t actually have to transfer money each month like you would for a credit card, for instance. This can be really handy so you don’t actually feel the impact of repayment quite as much.
If you’re self-employed, then repayments will happen during your self-assessment stage. So it’s worth swotting up on this or talking to your accountant about how this works.
Are the thresholds just in terms of salary?
No, a common misconception is that repayments will be based on your salary, but actually, it’s on income. Income can come from a variety of things like gaining interest on bank accounts. So it’s really important that you consider how you might go over the threshold and speak to a financial advisor about how best to manage your repayments and finances.
Does it affect my credit rating?
No! Postgraduate loans won’t register on credit reports – just like undergraduate loans. So it shouldn’t affect your credit rating in any way. Credit checks are a whole world of confusion, but we have a guide to help you navigate hard vs soft credit checks and what it all means.
How to apply for a postgraduate loan
You can apply for a postgraduate loan on the Student Finance website if you already have an account. Just use your existing log-in details. Or you can register for a new account and apply online too.
If you prefer to send off a paper application, then you can download one to print out and send off too.
Postgraduate loan deadline dates
The deadline for applying for a postgraduate loan is nine months after the first day of your last year of your course. Got that? No, we didn’t either. So here’s a table to help break it down:
| Date course starts | Course start date | Deadline |
|---|---|---|
| 1st August – 31st December | 1st September | 1st June |
| 1st January – 31st March | 1st January | 1st October |
| 1st April – 30th June | 1st April | 1st January |
| 1st July – 31st July | 1st July | 1st April |
Applications are currently open on Student Finance if you need to apply this year (2024/2025).
Can I apply for a postgraduate loan if I still have a student loan?
Yes, you can still apply and receive a postgraduate loan if you have an outstanding undergraduate student loan.
But it’s worth thinking about how repayment will work, as you’ll likely have to pay both at the same time. Current undergraduate repayments start at 9% over £25,000 (Plan 5 student loans), and as we know, postgraduate repayments start at 6% over £21,000.
So what could this mean for your repayments?
If you had an income of £30,000, you’ll pay back 9% of £5,000 for your undergraduate loan. This is £37.50 per month, and 6% of £9,000 for your postgraduate loan, £45 per month. This means your monthly repayments would come to a total of £82.50 for both your undergraduate and postgraduate loans.
Other ways of making money during postgraduate course
We know that the postgraduate loan itself is probably not enough to live off while you’re at university. Especially if the average loan starts at £11,000. So we’ve compiled a list of ways you can make money to help fund your lifestyle while studying.
1. Part-time jobs
The most obvious solution seems to be a part-time job when you’re studying for your master’s degree. You’ll have more research and learning at the postgrad level, so extra discipline is a must. If you’re studying for an MSc, then lab hours are definitely something to take into consideration. You’ll need to find a part-time job that is flexible to your schedule.
2. Side hustles
We love a side hustle, they can be a great help when you’re trying to study at the same time. Whether you’re looking to sell unwanted clothes online or start a thriving business on the side, side hustles can be a great way to make extra cash.
While you’re studying, you may want to rein in your grand entrepreneurial plans and go for something low effort. It can be an incredibly intense time of your life trying to juggle everything. But if you can think of a side hustle worth scaling up in the future, then go for it.
3. Scholarship options
For the brainy bunch out there, scholarships are a great way to help fund your postgraduate degrees.
We mentioned the Scholarship Hub as this is a brilliant platform for discovering new opportunities. The downside to scholarships is that they’re usually incredibly competitive with limited availability. But faced with high tuition fees, it’s worth a try.
4. Save up first
This might sound a bit flippant, but think about how you could save up first. It could be a very sensible approach. Why not work for a year after you graduate to save enough to help fund your course next year? It’s not ideal, but if it can save you from getting into (more) debt, then it’s definitely worth thinking about.
Don’t forget to download the Student Beans app for student discounts on all your favourite brands.
