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Repaying your Student Loan by HMRC and SLC watch

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    Got a question about repaying your student loan? Our experts are here to help.

    Duncan is a member of the HMRC Student Finance Team. He is responsible for producing guidance relating to HMRC's part in the student loan repayment process. He works in partnership with colleagues from Student Loans Company to help make the process as smooth as possible.

    David is an experienced member of the Repayments Quality & Knowledge Team.He maintains our centralised database of policies and processes, providing guidance for advisors when answering customer queries.

    Please be aware all answers will be posted on Monday 12 February.
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    When you repay the loan, ex. you earn £65,000 and repay £300 a month (based on £25,000 level) is there any interest we have to pay on top of it?
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    Hello, I graduate this year just wondering when do I have to start repaying my student loan back.

    Also, how do I go about making the arrangements to repay my Student loan when earning over the boundaries?

    Thanks,
    Hannah.
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    Student loan repayment shouldn't have been taken, help!
    I work for an agency as a temp worker, and in my recent pay slip they took £4 off for my student loans Repayment (I know it's not much) but I have not and will not hit the £21,000 mark to repay loans. Why has this happened and who is best to take it up with? HMRC, my agency or Student Loans? Thanks
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    A letter came through the post at my parents' address saying that I have not updated my employment details with the student loans company and that if I do not do this soon I will be charged extra interest on my loan.

    It says to go to repayment.slc.co.uk/ to do this. I just want to double check that this letter is legitimate - I haven't heard of having to update employment details (I thought it was all done through PAYE, if you earn over the threshhold then some of your pay is automatically deducted for repayments).
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    My daughter is looking to do a do a 4 year language degree so this morning I looked at the costs etc and what a fright.
    On the assumption that fees do not rise and that the RPI remains at 3.1% this is what I calculated the cost for the fees ONLY.
    Year 1: £9250 and cost of 3.1% = £9536.75
    Year 2: £9536.75 + £9250 = £18786.75 + 3.1% = £19369.14
    Year 3: £19369.14 + £1387.50 (15% of fees payable when studying abroad) = ££20756.64 + 3.1% = £21,400.10
    Year 4: £21,400.10 + £9250 = £30,650.10 + 3.1% = £30,600.25

    Until April after you graduate the interest is RPI 3.1% for 2017/18 but is variable and thereafter it will be RPI + 3% added each year and for 2017/18 this 6.1%.
    The interest would jump to £1866 the first year and unless she walks into a job of about £40,733.34 she would not be able to repay any actual loan and interest is added onto interest.
    To repay £1866 per year at todays rates the repayment from her salary would need to be £155.50 pm just to stand still and any future mortgage / loan would be reduced due to the repayments.
    The money that many will pay will be eyeeatering by the time you are 50 and will still 'owe' momey that will be 'written off'

    I truely feel that todays students are being punished yet Are the UK's future.
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    (Original post by Han_nah6586)
    Hello, I graduate this year just wondering when do I have to start repaying my student loan back.

    Also, how do I go about making the arrangements to repay my Student loan when earning over the boundaries?

    Thanks,
    Hannah.

    Hi Hannah. Thanks for the question.

    You’ll be due to start repaying your loan in the April after you graduate or leave your course - but only when your income is higher than threshold for your loan type. The amount you repay will depend on your income/earnings. You can check your loan type and the current repayment thresholds at the Student Loans Company website.

    HMRC will tell your employer when to start deductions, and which plan type you are on. You can also give this information to your employer, but remember only to do this when you become liable to repay or repayments might start too soon. Your employer will work out your repayments, deduct them from your pay and pass them to HMRC. Your repayments will show as deductions on your payslips and P60.

    If you become self employed, you’ll fill in a tax return each year. When you do this, your student loan repayment will be automatically calculated and added to your tax bill. You’ll need to pay this to HMRC. HMRC will pass your repayment information to Student Loans Company annually after the end of each tax year.

    There is more information around repaying student loans at https://www.gov.uk/repaying-your-stu...n/what-you-pay
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    If there are situation changes, like switching jobs, moving house or going abroad for a bit, how many days can you go before there are repercussions for not updating HMRC about these changes? Must you let them know a few days before your situation changes?
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    (Original post by ddink)
    Student loan repayment shouldn't have been taken, help!
    I work for an agency as a temp worker, and in my recent pay slip they took £4 off for my student loans Repayment (I know it's not much) but I have not and will not hit the £21,000 mark to repay loans. Why has this happened and who is best to take it up with? HMRC, my agency or Student Loans? Thanks
    Hi ddink Thanks for your question. First thing to check is the plan type you are repaying, as there are different repayment thresholds for each (in 2017/18 tax year, plan 1 is £17,775 and plan 2 is £21,000).

    You could then check with the payroll section at your agency and ask them to confirm which plan type they’re using, and to let you know how they calculated your repayment.

    Employers calculate deductions based on your earnings each time you’re paid, so sometimes things like working extra hours, overtime or a bonus can result in a student loan deduction even if your annual salary is below the threshold.

    I hope this helps.
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    What happens if you have two jobs?
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    (Original post by Han_nah6586)
    Hello, I graduate this year just wondering when do I have to start repaying my student loan back.

    Also, how do I go about making the arrangements to repay my Student loan when earning over the boundaries?

    Thanks,
    Hannah.
    Hi Hannah, students 'enter repayment' of their Student Loan on their 'Statutory Repayment Due Date' - the 6th April following the completion of/withdrawal from your course. This is the point at which you CAN begin to repay towards your Student Loan, provided you are in employment and earning over the Repayment Thresholds.

    If you are employed in the UK, Student Loan deductions will be taken automatically from your salary via the PAYE system, in the same way as Income Tax & National Insurance. For deductions to be taken you must have earned over the relevant threshold to how you are paid (weekly/monthly/etc).

    If you are employed but earn below the threshold, no deductions will be taken. If you are not employed, you are not expected to make any repayments towards your Student Loan.
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    (Original post by purple1106)
    If there are situation changes, like switching jobs, moving house or going abroad for a bit, how many days can you go before there are repercussions for not updating HMRC about these changes? Must you let them know a few days before your situation changes?
    Hi purple1106.

    It is worth keeping your personal details up-to-date to ensure any important information can reach you. When you change jobs, your new employer will let HMRC know that you’re now employed with them, and student loan deductions should continue if they’re due.

    If you are self employed and you’re moving abroad you should let HMRC know to ensure the correct tax, national insurance and student loan deductions are taken.

    I hope that helps to answer your questions.
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    (Original post by r10k12)
    A letter came through the post at my parents' address saying that I have not updated my employment details with the student loans company and that if I do not do this soon I will be charged extra interest on my loan.

    It says to go to repayment.slc.co.uk/ to do this. I just want to double check that this letter is legitimate - I haven't heard of having to update employment details (I thought it was all done through PAYE, if you earn over the threshhold then some of your pay is automatically deducted for repayments).
    Hi there, thank you for your question.

    Yes, the letter you received is legitimate.

    You are correct in that repayment is done through PAYE, and that repayments are deducted from your salary if you earn over the threshold. More often than not, HMRC inform SLC if a customer is in employed in the UK, and the repayment process through PAYE happens automatically.

    If you have received a letter (or Confirmation of Customer Details form) from us, this means that HMRC have informed us that they don't currently have a record of you being employed in the UK.

    If you are not employed, you are not expected to make repayments towards your Student Loan. If you are employed and you have received this letter, it could be that you have recently started with a new employer or have recently changed position within the same employer.

    In this instance, if you are employed, we would ask you to provide us with your employer's details.

    The quickest and easiest way to update these details with us is online at www.repayment.slc.co.uk. You will require your employer's PAYE Reference number (which can be found on a P60).

    Hope this helps.
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    (Original post by Jack22031994)
    What happens if you have two jobs?
    Hi Jack22031994.

    Thanks for your question.

    While you’re repaying your loan, HMRC will tell all your employers that you’re due to make student loan repayments. The important thing to note is that each employer will only make deductions if your earnings in that particular job are above the relevant threshold.

    Therefore if, for example, you earn above the threshold in job 1 you’d expect to have deductions taken. If you earn below the threshold in job 2, your employer would know you are repaying a loan but they wouldn’t take any deductions.

    I hope this helps.
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    (Original post by Duncan Gracie)
    Hi Jack22031994.

    Thanks for your question.

    While you’re repaying your loan, HMRC will tell all your employers that you’re due to make student loan repayments. The important thing to note is that each employer will only make deductions if your earnings in that particular job are above the relevant threshold.

    Therefore if, for example, you earn above the threshold in job 1 you’d expect to have deductions taken. If you earn below the threshold in job 2, your employer would know you are repaying a loan but they wouldn’t take any deductions.

    I hope this helps.
    Thanks

    What if you earn below the deduction in each job, but the total amount added together takes you over the threshold?
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    (Original post by ckfeister)
    When you repay the loan, ex. you earn £65,000 and repay £300 a month (based on £25,000 level) is there any interest we have to pay on top of it?
    Hi there, thank you for your question.

    Interest begins to accrue on your Student Loan from the date of your first payment (this can either be the first Tuition Fee Loan instalment paid to the University, or the first Maintenance Loan instalment paid to the student) and will continue to accrue until the loan is repaid in full or written off.

    Interest can accrue at different rates depending on when you took out your loan, www.studentloanrepayment.co.uk provides detailed information on the interest rate that will be applied to your loan.

    Hope this helps answer your question.
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    (Original post by Jack22031994)
    Thanks

    What if you earn below the deduction in each job, but the total amount added together takes you over the threshold?
    Hi Jack

    Each employer operates the threshold independently so in the circumstances you describe neither employer would take make deductions.

    However, if for any reason you needed to complete a self assessment tax return (because perhaps you had income from self employment or property), your student loan charge would be calculated against your full income for the year including your employment.
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    (Original post by Duncan Gracie)
    Hi Jack

    Each employer operates the threshold independently so in the circumstances you describe neither employer would take make deductions.

    However, if for any reason you needed to complete a self assessment tax return (because perhaps you had income from self employment or property), your student loan charge would be calculated against your full income for the year including your employment.
    Okay Thanks

    so if I had two jobs on PAYE ( so no self-employment or anything that would require a tax return). Say both earned £12,000, so would be earning £24k in total, I would not actually be paying anything back even though its over the threshold?
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    (Original post by Jack22031994)
    Okay Thanks

    so if I had two jobs on PAYE ( so no self-employment or anything that would require a tax return). Say both earned £12,000, so would be earning £24k in total, I would not actually be paying anything back even though its over the threshold?
    Hi Jack

    Yes, in the circumstances you describe and under the current repayment policy, that’s what would happen.

    Thanks again for your questions.
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    (Original post by melliottme)
    My daughter is looking to do a do a 4 year language degree so this morning I looked at the costs etc and what a fright.
    On the assumption that fees do not rise and that the RPI remains at 3.1% this is what I calculated the cost for the fees ONLY.
    Year 1: £9250 and cost of 3.1% = £9536.75
    Year 2: £9536.75 + £9250 = £18786.75 + 3.1% = £19369.14
    Year 3: £19369.14 + £1387.50 (15% of fees payable when studying abroad) = ££20756.64 + 3.1% = £21,400.10
    Year 4: £21,400.10 + £9250 = £30,650.10 + 3.1% = £30,600.25

    Until April after you graduate the interest is RPI 3.1% for 2017/18 but is variable and thereafter it will be RPI + 3% added each year and for 2017/18 this 6.1%.
    The interest would jump to £1866 the first year and unless she walks into a job of about £40,733.34 she would not be able to repay any actual loan and interest is added onto interest.
    To repay £1866 per year at todays rates the repayment from her salary would need to be £155.50 pm just to stand still and any future mortgage / loan would be reduced due to the repayments.
    The money that many will pay will be eyeeatering by the time you are 50 and will still 'owe' momey that will be 'written off'

    I truely feel that todays students are being punished yet Are the UK's future.
    Hi melliottme,

    Thanks for getting in touch. You can find out more information about interest and repayments at www.slc.co.uk/repayment

    How much your daughter borrows won't affect her repayments each month.

    Thanks
 
 
 
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