SLC Business Plan 2026/27: Maintenance Grants Return in 2028, LLE From January 2027

NEWS · STUDENT FINANCE · 3 SEPTEMBER 2026

What the Student Loans Company does, and does not decide

The Student Loans Company (SLC) administers student finance on behalf of the UK government and the devolved administrations. It does not set eligibility rules, interest rates, or repayment thresholds; those are determined by the governments. SLC processes applications, pays out loans and grants, and collects repayments.

SLC is a non-profit organisation that manages the student finance system in England, Scotland, Wales, and Northern Ireland. It acts as the delivery body for the Department for Education (DfE) in England, the Scottish Government, the Welsh Government, and the Northern Ireland Executive. Each government decides the policy parameters, such as who qualifies for support, the maximum amounts available, and the terms of repayment. SLC then implements those decisions through its operational systems.

In the 2025/26 financial year, SLC processed around 2 million applications and paid out approximately £24.7 billion in loans and grants to students. The total value of the loan book it manages stands at £324.8 billion, covering nearly 10 million customers. This includes loans for tuition fees, maintenance, and postgraduate study, as well as the collection of repayments from graduates once they are earning above the relevant threshold.

SLC does not decide the interest rate applied to loans, nor does it set the repayment threshold or the length of the repayment period. These are set by the respective governments, often following reviews or consultations. For example, the interest rate on Plan 2 loans in England is linked to the Retail Price Index (RPI) plus up to three percentage points, but the exact rate is confirmed by the government each year. SLC simply applies the rate that is announced.

Similarly, SLC does not determine who is eligible for a maintenance grant or a tuition fee loan. The eligibility criteria, such as household income thresholds and residency requirements, are defined in legislation and guidance issued by the governments. SLC checks applications against these criteria and makes payments accordingly. If a student is refused support, the decision is based on the rules set by the government, not on SLC's own discretion.

In its 2026/27 business plan, SLC sets out its operational priorities, which include delivering the Lifelong Learning Entitlement (LLE) from January 2027 and preparing for the reintroduction of maintenance grants for the 2028/29 academic year. These are policy changes announced by the UK government, and SLC's role is to implement them efficiently. The plan also covers improvements to digital services and customer satisfaction, but it does not alter the fundamental division of responsibilities between policy-makers and the delivery body.

Lifelong Learning Entitlement: what changes from January 2027

The Lifelong Learning Entitlement (LLE) will be introduced for courses starting on or after 1 January 2027. It replaces the current tuition fee loan system for higher education courses in England, offering a single entitlement that can be used flexibly across full years or individual modules.

The LLE is a major reform to student finance in England. It aims to support lifelong learning by giving individuals a notional entitlement of four years' worth of tuition funding, which can be used over a person's working life. Unlike the current system, where students can access a tuition fee loan for a full course, the LLE allows learners to study individual modules or short courses, as well as full qualifications, up to a maximum equivalent to four years of full-time study.

From January 2027, new students starting an eligible course in England will be able to apply for an LLE loan to cover their tuition fees. The loan is paid directly to the higher education provider. The amount available per year or per module will be capped at the equivalent of the current maximum tuition fee loan, but the exact figure will be confirmed by the government. For the 2026/27 academic year, the maximum tuition fee loan for new full-time students is £9,535, but this may change for LLE courses.

The LLE differs from the current system in several ways. First, it is modular, meaning learners can take individual modules without committing to a full degree. Second, it is available for both full-time and part-time study, and for courses at levels 4 to 6 (equivalent to higher national certificates, foundation degrees, and bachelor's degrees). Third, the entitlement is measured in credit, with one year of full-time study equal to 30 credits. Learners can use their entitlement flexibly over their lifetime, rather than being limited to a set number of years after leaving school.

Eligibility for the LLE is similar to current student finance: applicants must be resident in England, be studying at a registered provider, and meet the usual age and nationality requirements. However, the LLE is also open to older learners, with no upper age limit, provided they meet the residency criteria. The government has said that the LLE will be available for courses starting from January 2027, with a full rollout for the 2027/28 academic year.

In its business plan, SLC notes that the LLE will be delivered in phases. The first phase, for courses starting in January 2027, will be followed by a second phase in spring 2027 for courses starting later in the year. However, the plan also states that the implementation is subject to ministerial re-prioritisation, meaning that the timeline could change if the government decides to allocate resources elsewhere. SLC is working with the DfE to ensure that the necessary systems are in place for the launch.

Maintenance grants are coming back: what we know and what we do not

The UK government has announced that maintenance grants will be reintroduced for students in England, with SLC planning to deliver them from the 2028/29 academic year. The exact amounts and eligibility thresholds have not yet been set, and the timetable is subject to change.

Maintenance grants were previously available to lower-income students in England, but they were replaced by larger maintenance loans in 2016. The government has now decided to bring them back as part of its plans to widen access to higher education. The SLC business plan for 2026/27 confirms that work will begin on reintroducing maintenance grants during the 2026/27 financial year, with a target to have them available for students starting courses in the 2028/29 academic year.

What is known is the timetable. SLC will undertake a discovery phase in 2026/27 to understand the requirements and design the delivery model. This will be followed by development and testing, with a go-live date set for the 2028/29 academic year. However, the plan notes that the timeline is subject to ministerial re-prioritisation, so it could be delayed if the government changes its priorities.

What is not known is the amount of the grant and the household income thresholds that will apply. The government has not yet announced these details. In the past, maintenance grants were means-tested, with full grants available to students from households with incomes below a certain level, and partial grants for those with slightly higher incomes. The new grant is expected to follow a similar model, but the specific figures will be confirmed by the DfE in due course. Until then, any numbers would be speculation.

The reintroduction of maintenance grants will affect how maintenance support is calculated. Currently, students can apply for a maintenance loan, which is partly means-tested based on household income. If a grant is introduced, it is likely to be paid in addition to a reduced maintenance loan, or it may replace part of the loan for eligible students. The interaction between grants and loans will be clarified once the policy is finalised. SLC will need to update its systems to handle both types of support.

For students, the key point is that maintenance grants will not be available for the 2026/27 or 2027/28 academic years. Those starting courses before 2028/29 will continue to rely on maintenance loans. Students who are unsure about their entitlement should check the GOV.UK student finance pages for the current rates and eligibility criteria. The SLC business plan does not provide any further details on the grant amounts, so students are advised to wait for official announcements.

Alternative Student Finance for students who cannot take interest-bearing loans

Alternative Student Finance (ASF) is a Sharia-compliant alternative to interest-bearing student loans, designed to support students who cannot take conventional loans for religious reasons. It will be introduced after the Lifelong Learning Entitlement, with a commitment from the DfE to deliver it.

ASF is intended to provide financial support to students who, due to their faith, are unable to access interest-bearing loans. The current student loan system in England charges interest on loans, which is not permissible under Islamic law. ASF aims to offer an equivalent product that does not involve interest, allowing Muslim students to access higher education without compromising their beliefs.

The SLC business plan for 2026/27 confirms that ASF is a priority, but it will be implemented after the LLE is fully rolled out. The plan states that ASF will follow the LLE, meaning that the design and delivery of ASF will be informed by the lessons learned from implementing the LLE. The DfE has made a commitment to deliver ASF, as set out in its white paper on higher education.

The exact model for ASF has not been finalised. It is likely to involve a Sharia-compliant structure, such as a Takaful or Murabaha arrangement, where the provider buys the student's tuition and then sells it back at a higher price, or where repayments are made without interest. The key principle is that the total amount repaid does not exceed the amount borrowed, ensuring compliance with Islamic finance rules.

ASF will be available to students who meet the eligibility criteria for student finance, but who would otherwise be excluded because of the interest element. It is expected to cover tuition fees and possibly maintenance costs, depending on the final design. The government has said that ASF will provide 'equivalent outcomes' to conventional loans, meaning that students should not be disadvantaged by choosing the alternative.

The timeline for ASF is not specified in the business plan, but it is likely to be several years away. The LLE is due to launch in January 2027, and ASF will be developed after that. SLC will need to work with Islamic finance experts and the DfE to design a product that meets the needs of students and complies with regulatory requirements. Until then, students who cannot take interest-bearing loans may need to explore other sources of funding, such as scholarships or savings.

Repayments: the 91% target and what it means for graduates

SLC aims to collect 91% of the repayments that are due from graduates, using data from HMRC to track earnings and ensure that repayments are made correctly. This target is part of SLC's efficiency drive, with a return on investment of 19:1 for fraud prevention.

Student loan repayments are collected through the tax system. For graduates in the UK who are employed, repayments are deducted automatically from their salary through PAYE, just like income tax. For self-employed graduates, repayments are collected through self-assessment. SLC works with HMRC to receive data on earnings and to ensure that repayments are made at the correct rate.

The repayment efficiency target of 91% means that SLC expects to collect 91% of the total amount that is due in any given year. This is a measure of how effectively SLC and HMRC are at identifying borrowers who are due to repay and collecting the correct amounts. The remaining 9% may be due to delays in reporting, errors, or borrowers who are not yet earning above the threshold.

For graduates, this target has implications. It means that SLC is focusing on improving data sharing with HMRC to reduce errors and ensure that repayments are accurate. It also means that SLC is paying more attention to overseas repayers, who may not be captured by the UK tax system. Graduates who move abroad are still required to make repayments, and SLC has arrangements with other countries to collect these, but the process can be more complex.

The 91% target is part of SLC's broader efficiency strategy. The business plan highlights that SLC has achieved a return on investment of 19:1 for its fraud prevention activities, meaning that for every £1 spent on tackling fraud, it saves £19 in incorrect payments. This is important because it helps to protect the public purse and ensures that funds are available for genuine students.

Graduates on Plan 5 loans, which apply to English students starting courses from August 2023, have a repayment threshold of £25,000 per year, with repayments set at 9% of income above that threshold. The interest rate is linked to the Retail Price Index (RPI), but the exact rate is set by the government. For more details, graduates should refer to the GOV.UK page for their specific loan plan. SLC does not set these rates; it only administers them.

Digital services, satisfaction targets and the money behind the plan

SLC is investing in its Digital Services for Students (DSFS) platform and a programme called Enable to modernise its operations, with a budget of £372.5 million for 2026/27. It employs around 3,000 staff and has set customer satisfaction targets as part of its service improvement.

The SLC business plan for 2026/27 outlines significant investment in digital services. The DSFS platform is the core system that handles applications, payments, and repayments. SLC is continuing to develop this platform to make it more user-friendly and efficient. The plan also mentions Programme Enable, which is a broader transformation programme that will run until 2028/29, aiming to replace legacy systems and improve data management.

The total budget for SLC in 2026/27 is £372.5 million. This is split between operational costs and capital investment. The operational budget covers staff salaries, IT running costs, and customer service operations. The capital budget is for investment in new systems and infrastructure. The plan does not break down the exact split, but it indicates that a significant portion will be spent on the LLE and maintenance grant projects.

SLC employs approximately 3,000 staff, who are based in offices across the UK, including Glasgow, Darlington, and Llandudno. The business plan highlights the importance of staff development and retention, as well as the need to recruit specialists in areas such as data science and digital design. SLC also works with external partners, such as HMRC and the Student Awards Agency for Scotland, to deliver its services.

Customer satisfaction is a key performance indicator for SLC. The plan sets targets for customer satisfaction scores, which are measured through surveys. The specific targets are not published in the plan, but SLC aims to improve its service levels year on year. In recent years, SLC has faced criticism over long call waiting times and delays in processing applications, so the plan includes measures to address these issues, such as increasing online self-service options and improving the accuracy of communications.

The business plan also notes that SLC has a new Chair and is working with the Central Digital and Data Office (CDDO) to ensure that its digital projects align with government standards. The CDDO provides guidance on technology and data use across the public sector. This collaboration is intended to ensure that SLC's systems are secure, scalable, and cost-effective.

What did the SLC 2026/27 business plan announce?

The plan confirmed the Lifelong Learning Entitlement will launch for courses starting in January 2027, with a second phase in spring 2027. It also announced work will begin on reintroducing maintenance grants for the 2028/29 academic year, and that Alternative Student Finance will follow the LLE. The plan sets out SLC's operational priorities and budget.

When does the Lifelong Learning Entitlement start?

The LLE will be introduced for courses starting on or after 1 January 2027. A second phase will follow in spring 2027 for courses starting later in the year. The implementation is subject to ministerial re-prioritisation, so the timeline could change if the government adjusts its priorities.

Are maintenance grants coming back?

Yes, maintenance grants are being reintroduced for students in England. SLC plans to deliver them from the 2028/29 academic year, with a discovery phase in 2026/27. However, the exact amounts and eligibility thresholds have not yet been announced, and the timetable is subject to change.

What is Alternative Student Finance?

Alternative Student Finance is a Sharia-compliant alternative to interest-bearing student loans, designed for students who cannot take conventional loans for religious reasons. It will be introduced after the Lifelong Learning Entitlement, with a commitment from the DfE to deliver it. The exact model is still being developed.

How much does the Student Loans Company pay out each year?

In the 2025/26 financial year, SLC paid out approximately £24.7 billion in loans and grants to students. It manages a loan book of £324.8 billion, covering nearly 10 million customers. These figures are from SLC's 2026/27 business plan.

LAST REVIEWED 3 SEPTEMBER 2026