Postgraduate tuition fees can be significant, and government loan caps do not always cover the full cost. Future Earnings Agreements (FEAs) are one alternative funding option available to postgraduate students, alongside traditional student loans and other forms of finance. This article explains how they work, who is eligible, and what the repayment terms typically look like.

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What is a future earnings agreement?

A Future Earnings Agreement (FEA) is a way for postgraduate students to fund tuition fees without taking out a traditional student loan. Like a student loan, you receive money upfront to cover fees and repay it later once you are earning — but the structure is different in several important ways.

With an FEA, no interest is charged on the amount borrowed. Instead, you repay a fixed percentage of your salary once your earnings exceed a set threshold, for a defined number of repayments. For example, an agreement might require repayments of 15% of salary above £35,000 for a maximum of 60 monthly payments.

The first regulated provider of FEAs is a company called StepEx, which works with a number of universities including Cambridge and London Business School.

Always make sure you can afford repayments.

Who can take out a future earnings agreement?

FEAs are primarily available to UK and Irish nationals ordinarily resident in the UK. Some providers also consider EU nationals, typically requiring Settled or Pre-Settled status under the EU Settlement Scheme. Applicants usually need a UK or EU bank account and will undergo a credit and background check, though eligibility is assessed on projected future earnings rather than credit history.

Having an existing student loan does not disqualify you from taking out an FEA to help you pay for university, though you should carefully consider whether you can manage repayments on both simultaneously.

Always make sure you can afford repayments.

How much can you borrow?

With a Future Earnings Agreement, you can borrow up to the total tuition fees for your course. This is different to a traditional loan as the amount you can borrow isn’t necessarily capped.

For context, for the 2025/26 academic year the government Postgraduate Master's Loan is capped at £12,858 for students in England. In Wales, the support is even more significant, with eligible students able to access up to £19,255 as a contribution to their costs. For programmes such as MBAs or specialist Master's degrees, where fees can exceed these figures, an FEA may be used to cover some or all of the shortfall.

Always make sure you can afford repayments.

How are repayments calculated?

Repayments are based on a fixed percentage of your salary above a minimum income threshold, for a set number of monthly payments. The amount you repay in total depends on what you earn: higher earners repay more per month and may reach the maximum repayment cap sooner.

This is different to paying off a normal student loan, which is based on a percentage of your total salary past a minimum threshold, plus interest being added to the original sum to be repaid.

As an illustration: borrowing £20,000 with an expected post-study salary of £35,000 might result in repayments of 12.9% of annual salary over 60 months, totalling around £22,575 — though the actual figure will vary with income.

It is worth noting that FEAs carry a maximum repayment cap, which can be significantly higher than the original sum borrowed. For example, a £10,000 FEA might carry a cap of £20,000. Higher earners could reach this cap, meaning the total cost of borrowing could be substantially more than the original amount.

Repayments pause if your income falls below the threshold or you stop earning, and resume when you return to work. The repayment clock only runs during months when payments are made, so a career break does not reduce your total repayment count.

In 2026, most agreements set the minimum income threshold at between £25,000 and £30,000 — notably higher than the £21,000 threshold for government postgraduate loans, which has been frozen since 2021.

The cost of borrowing through an FEA depends on your income and is not expressed as a fixed APR. For full representative examples and cost of credit information, refer to your provider's agreement documentation.

StepEx has a calculator to show how much you repay based on future earnings. Always make sure you can afford repayments before borrowing.

How do FEAs compare to traditional student loans?

Whether an FEA is preferable to a traditional student loan depends on individual circumstances, particularly expected post-graduation earnings.

One notable difference is transparency: traditional student loan interest accrues continuously and can make it difficult to project a final repayment figure. An FEA has a defined number of payments and a known maximum cap, which some borrowers find easier to plan around.

However, there are trade-offs. For lower earners, repaying a percentage of salary (even a modest one) can represent a significant monthly commitment. For higher earners, the percentage-based structure means monthly repayments are larger, and the total amount repaid could reach the maximum cap.

A key safety net of an FEA is the minimum income threshold. In 2026, most agreements mandate that you only begin repayments once your gross annual salary exceeds £25,000 to £30,000. If your income drops below this level, or if you become unemployed, your repayments are automatically paused. This threshold is notably higher than the standard £21,000 threshold for government postgraduate loans, which has remained frozen since 2021 despite rising average wages.

FAQs

1. Are repayments capped?

FEAs have a fixed number of repayments and no interest, so the total amount repaid is bounded. However, the maximum repayment cap can be considerably higher than the original sum borrowed, particularly for higher earners.

2. When do repayments start?

Repayments begin once your income exceeds the minimum threshold set in your agreement. StepEx's representative example uses a threshold of £30,000, though this varies by individual agreement.

3. Are FEAs available to undergraduates?

Future Earnings Agreements by StepEx are currently available for postgraduate courses only.

4. Are FEAs available outside the UK?

Eligibility is open to UK and EU postgraduate students, subject to residency and status requirements.