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Is it true you don't have to pay back student loan until you earn over certain amount

Is there a catch at all?

Im considering studying for a degree where careers are very competitive so there could be a chance i don't get the job i desire...

If i don't earn over a certain amount, do I not have to pay my student loan back?

Reply 1

hallamstudents

Official Rep

Original post by Ashleylaw

Hey there @Ashleylaw !
Yes that is true, I believe they've just lowered the amount you have to earn before you start paying it back. It comes off your wage slip from your job and goes straight to SFE. There is certain conditions that mean you don't have to pay it back or your payments get delayed. You can find those conditions and when you have to start paying it back here: https://www.gov.uk/repaying-your-student-loan/when-you-start-repaying

My advice for going after a job that is very competitive is to make sure you're getting some sort of experience under your belt whilst you're at university, even if you're only doing it for yourself rather than a company. If it's a creative degree, start a portfolio. If it's a writing degree, work on your own piece of writing or start a blog. There's no point dwelling on your future, you've just got to put yourself in the best possible position to get there.

Hope this helped!
Lucy - Digital Student Ambassador SHU

Reply 2

Euapp

Original post by Ashleylaw

In a word No. Depending on the plan you are locked into there is a threshold of earnings under which you don’t repay the loan. Once you do achieve the threshold salary or earnings if you are self employed, you pay a percentage of earnings over and above this threshold for a certain number of years with the maximum time limit being forty years on the new plans, thirty on the older plans. Anything not paid back after this time span is wiped.
The interest however accumulates during your study from the date of the first payment, so whilst some students will never even pay off the capital, certain in a given salary range will pay back far more than they actually borrowed.

(edited 9 months ago)

Reply 3

artful_lounger

Universities Forum Helper

I would recommend reading this article on the gov.uk site about SFE loans: https://www.gov.uk/government/news/8-things-you-should-know-about-your-student-loan--2

But yes, you don't make repayments if you're earning under a certain threshold. These payments will also be proportional to your income, so you won't ever be repaying more than you can afford. For PAYE jobs (i.e. most employees in the UK) the whole process is handled by payroll and you'll just see it going out on your paycheques with your NI contributions and income tax, so no real action is needed from your part. If self-employed or a contractor and you have to declare your own taxes though then you will need to do some work on that.

Also as noted, after a certain length of time (40 years for students taking out loans now I believe, or when you reach state pension age) your remaining loan balance is written off. If you ended up earning under the threshold for 40 years then you could conceivably not have to pay back any of your student loan. The most common and likely scenario though is you'll end up repaying some but not all of it before it gets written off.