The recently elected Labour Government have announced their first budget, as well as increases to tuition fees and maintenance loans.
What are the most important changes and how will they affect students?
The recently elected Labour Government have announced their first budget, as well as increases to tuition fees and maintenance loans.
What are the most important changes and how will they affect students?
The big picture
Overall, there are several positives in the budget such as record investment in the NHS and boosts to the income of low earners.
Tuition fees and the maximum maintenance loan some students can borrow will be increasing by 3.1% from October 2025, in line with projected inflation.
However, direct support for the wider student body is lacking.
Universities and students’ unions are calling on the government to do more.
Key facts & figures
Here is what’s new in the Autumn Budget and tuition fee policies:
£9,535 Undergraduate students on regular full-time courses will pay £285 more per year from October 2025.
£414 Students living away from home in London from the lowest income families will be able to borrow up to £414 more per year for maintenance, to a new total of £13,762.
£1.40 Workers aged 18 to 20 will earn £1.40 more per hour from April 2025.
£0.77 Workers aged 21+ will earn £0.77 more per hour from April 2025.
£372m Universities will collectively pay approx. £372m more in tax through National Insurance.
£3 The bus fare cap outside London is increasing to £3 in 2025. Commuter students could be up to £110 poorer per term.
5% Landlords now pay 5% tax on second homes and buy-to-let, up from 3%.
What’s good for students?
✅ The national minimum wage going up benefits working students.
✅ The London bus fare cap remains at £1.75.
✅ Maintenance loan increases will help those who need the most support.
✅ Investment in the NHS could improve mental health outcomes.
What’s bad for students?
❌ The maintenance loan increase is based on predicted rather than real inflation, leaving students poorer than equivalent students in previous years.
❌ The cost of living and rent could get worse, indirectly caused by increased taxes on business and landlords, as well as bus fares outside London.
❌ Employment and housing options for students could become more limited.
Going forward & further reading
Students, SUs, and Universities are likely to continue being impacted by the cost of living, rent, and tighter budgets.
The wider economy may be headed towards stronger growth with positive investment in wages, the NHS, as well as clamping down on capital gains.
Professor Jane Harrington, Vice Chancellor at the University of Greenwich is calling for the government to do more, for example by reinstating maintenance grants that students do not have to repay.
A new paper by economist Tim Leunig also suggests that the undergraduate fees system may need a bigger overhaul.
The CEO of University Alliance, Vanessa Wilson, offers some strong concluding words on the situation:
“Going forward we urge the government to prioritise reinstating means-tested maintenance grants for the students in most need. It is simply wrong that they should have to borrow more than their more privileged counterparts. The government should also look again at the student loan repayment model, so that it is rebalanced with a fairer, more progressive payment structure for lower- and middle-income graduates.”