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    Hello, I want to know what will happen with my student loans if I fail uni. I have already done a repeat of first year in uni and am now second year. If I fail uni and am offered a resit for coursework and exams I will take it but if I am not or if i fail my resit or drop out what will happen with my student loan, what will I have to pay and in what time. Any help or resources will be greatly appreciated.
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    Assuming you have the regular Student Finance England loan for post-2012 entry:

    If you have to leave your course, SFE will stop making any further payments and the total amount you've received up to that point is your repayment amount. This also applies if you leave prior to term 3 - the last tuition fee and maintenance payments won't be made, and won't be added to your loan. From that point, the repayment arrangements are the same as if you completed the course.

    Short version: Starting the April after you leave, if you're earning over £21,000 a year your employer deducts 9% of your earnings over £21,000 (e.g. if you earn £22,000, you pay £90 a year). After 30 years, the loan is wiped and you don't pay any more.

    Long version:

    During your course, and until the April after you complete/leave, interest of RPI (currently 0.9%) + 3% is added annually. So, when you leave, the balance of the loan is actually higher than the amount you received. That April you start repaying (automatically, if your employer uses PAYE) at a rate of 9% of any earnings over £21,000 per year. At the same time, the interest on the loan depends on your earnings, and is between RPI (less than £21,000) and RPI + 3% (at least £41,000).

    The loan is cancelled after 30 years if it hasn't already been paid off. In practice, if you're making low repayments you won't actually reduce the balance of your loan (the interest will be higher than your payments), and the 30 years will probably pass with you paying nowhere near the amount you actually borrowed. If you're making moderate repayments, you may end up paying more than the amount you borrowed over the 30 years, and with high repayments you'll actually pay the loan off at some point. For higher earners, there's some intricacy in whether you should pay off your loan manually to reduce the amount of interest you have to pay.


    More info: Student Loans Company
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    if I fail my first year will I have to pay back a loan, for example after university I got a job paying me £800 a month
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    (Original post by mmayat)
    what if i fail my first year will i have to pay back loan,
    I believe you only pay back the £9,000
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    (Original post by SH5540)
    I believe you only pay back the £9,000
    £9000 tuition fees for the first year (still lower on a very tiny minority of courses I think)
    and whatever maintenance loan you got in the year you studied, plus interest on both.
 
 
 
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