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Student loan repaymentTSR Wiki > Student Finance > Student loan repayment Student Finance England is part of the Student Loans Company. Repayment of your student loan is handled by the Student Loans Company. For the most up-to-date information on repaying your student loans please go to: www.direct.gov.uk/studentfinance Also check out the what, when and how to repay checklist. Repayments are based on future earnings, not what you borrowed. You won't have to make any repayments until you've left university or college and earn over a set amount. Grants and bursaries don't have to be repaid unless you leave your course early. Repayment for new students If you're a new full-time student starting in September 2012 you won't have to repay anything towards your student loans until April 2016, even if you leave your course early. Any bursaries and grants don't have to be paid back. New part-time students will enter repayment at the start of the tax year on 6 April, four years after the first day of their first year of study or the April after they leave the course (whichever happens sooner). New Students starting in September 2012 will only have to start repaying their student loan when they've a job earning £21,000 each year. Once you're earning over £21,000 you'll pay 9% on everything you earn over this amount. So, if you're earning £25,000 a year you'll pay 9% on £4000. This means you would repay £360 a year or £30 a month. The amount you have to pay back will depend on what you earn NOT what you've borrowed. If your income drops below £21,000 or £1,750 a month then repayments will stop. New students who start their course before the 1st September 2012 will have the same repayment terms for students continuing their studies in 2012.
Your monthly payments
Repayment for continuing studentsIf you're a continuing student in 2012 you'll have to start paying back your student loans the April after you leave university or college. Any bursaries or grants don't have to be paid back. Students continuing their studies in 2012 and new students who start their course before 1st September 2012 will only have to start repaying their student loan when they've left university or college and earn over £15,795 each year. Once you're earning over £15,795 you'll pay 9% on everything you earn over this amount. So, if you're earning £18,000 a year you'll pay 9% on £2205. This means you would repay £192 a year or £16 a month. Once again, the amount you've to pay back each month from your salary will depend on what you earn NOT what you've borrowed. If your income drops below £15, 795 then all repayments will stop.
How you pay back your loanIf you're an employee then your employer will calculate your repayments and take it out of your earnings along with your tax and National Insurance payments each month. If you’re self-employed you have to work out your own repayments in the same way you would have to work out your tax and National Insurance payments. If you move abroad for more than 3 months you'll have to inform the Student Loans Company. They'll ask to you fill in an Overseas Income Assessment form and, based on this information, will give you a repayment schedule. You still have to repay your student loans even if you live abroad. Interest on your student loanYou're charged interest on your loan from the time your first payment is made by SFE until you pay your loan back in full. The interest rate charged depends on the Retail Price Index (RPI). If you're a new student starting on or after the 1st September 2012 the interest rate on your loan will be calculated as follows: While you’re studying the interest rate on your loan will be RPI plus 3 per cent
If you started your course prior to 1st September 2012 the interest rate on your loan will be fixed at RPI or the Bank of England base rate plus one per cent, where the Bank of England base rate is lower than RPI. |
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