How do student loans work?
Discussion and questions about student financial support arrangements - from government loans and grants to university bursaries. Please use the main Money & Finance forum for more general financial topics.
This thread is sponsored by:
| Announcements | Posted on | |
|---|---|---|
| Important: please read these guidelines before posting about exams on The Student Room | 28-04-2013 | |
-
- Reputation:
- Thread Starter
- Junior Member
- Location: Eastbourne
- Posts: 33
How do student loans work?Hello,
recently I became interested in all the college and uni stuff, as I am about to finish year 10, and will be choosing my college courses early year 11. I have been told by my friends mom, who got told by someone else that if you get a student loan, and get a job, but don't go over a certain limit of money per year, you don't have to pay it off?
So I am wondering, is this true? And if not, how does all of that work?
Thanks in advance, Matt
-
- Reputation:
- Exalted and Worshipped Member
- Posts: 1,164
Re: How do student loans work?When repayments start
Courses starting before 1 September 2012
Different rules apply to repayments if your course starts before September 2012
Paying back your student loan 2011/12
Full-time and part-time students who start their course after 1 September 2012 begin paying back their student loan once they earn more than £21,000 year.
Repayments for courses starting after 1 September 2012 won't begin until April 2016.
For example, if your course finishes in June 2015 and you get a job paying £25,000 in September 2015, you start repayments in April 2016.
If your income falls below £21,000 a year, your repayments stop.
If you're a part-time student earning more than £21,000 a year you start repaying your loan in the April four years after starting your course. This applies even if you're still studying.
Students can pay back all or some of their loan at any time without incurring an early repayment charge.
http://www.direct.gov.uk/en/educatio...98/dg_10034866 -
- Reputation:
- Respected Member
- Posts: 171
Re: How do student loans work?If you dont earn over a certain limit ... used to be £15000 a year (don't know what it is now though) for 20 years than you don't have to pay it back. But with a degree and experience you've got to be god awful at whatever your doing not to earn 15 grand a year in your field.
-
- Reputation:
- PS Helper
- TSR Legend
- Location: Coventry, UK
- Posts: 10,097
Re: How do student loans work?Hiya
The basic principle is that the student loan people (SLC) give you your loans when you're at uni. You only pay them back once you are earning over a certain amount (I think at the moment it is £21k but it might change - I pay for anything above £15k) you pay a percentage of that earning, which I believe is 9%.
Example:
If you earn £14k, you pay back nothing.
If you earn £25k, you pay 9% of £4k, so £360 (£30 per month)
25 years after you take out the loan, any remainder is written off completely.
The figures I've used here are largely unimportant as they will almost certainly have changed by the time you hit university, but you get the basic gist If you have any more questions, just ask
-
- Reputation:
- Junior Member
- Location: World
- Posts: 43
You dont really need to be worrying about that for now but yes you will have start paying back your loan once you have started earning about 21k + then they will take out a certain amount monthly so until you dont start earning this much you wont be required to pay it back.
Hope that helped for more info check out the student finance website not that you need it right now -
- Reputation:
- Overlord in Training
Re: How do student loans work?30 years now(Original post by Ice_Queen)
Hiya
The basic principle is that the student loan people (SLC) give you your loans when you're at uni. You only pay them back once you are earning over a certain amount (I think at the moment it is £21k but it might change - I pay for anything above £15k) you pay a percentage of that earning, which I believe is 9%.
Example:
If you earn £14k, you pay back nothing.
If you earn £25k, you pay 9% of £4k, so £360 (£30 per month)
25 years after you take out the loan, any remainder is written off completely.
The figures I've used here are largely unimportant as they will almost certainly have changed by the time you hit university, but you get the basic gist If you have any more questions, just ask
Well you will have never started paying. But after 30 years it will be completely written off.(Original post by VampiricJaws)
So if i never earn over £21k, when do I completely stop paying? After how many years? -
- Reputation:
- PS Helper
- TSR Legend
- Location: Coventry, UK
- Posts: 10,097
Re: How do student loans work?[QUOTE=VampiricJaws;38390456]
Your £25k salary minus the £21k that doesn't count(Original post by Ice_Queen)
Example:
If you earn £25k, you pay 9% of £4k, so £360 (£30 per month)
Where is the £4k from?
And i don't think its possible to live on £21k a year for 30 years
And it is... my parents earned less than that pretty much put together the whole time I was growing up. -
- Reputation:
- Benevolent Member
- Posts: 697
Re: How do student loans work?[QUOTE=VampiricJaws;38390456]
Anything over 21k you pay 9% of. So the 4k is what you have to pay 9% of each year.(Original post by Ice_Queen)
Example:
If you earn £25k, you pay 9% of £4k, so £360 (£30 per month)
Where is the £4k from?
And i don't think its possible to live on £21k a year for 30 years
-
- Reputation:
- PS Helper
- TSR Legend
- Location: Coventry, UK
- Posts: 10,097
Re: How do student loans work?[QUOTE=drummer;38390496]
You might want to end quote on that(Original post by VampiricJaws)
Anything over 21k you pay 9% of. So the 4k is what you have to pay 9% of each year.
