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Student Loan Repayments

Do you know when and how you need to make repayments on your student loan?
student-loan

There are 2 different plans for repaying your student loan:

Plan 1

  • English and Welsh students who started before 1 September 2012
  • All Scottish and Northern Irish students

If you fit into Plan 1, you start paying your student loan back when you earn over £17,335. This figure changes on 6th April every year.

The earliest you’ll start re-paying your student loan is the April after you leave your course. If your income drops below £17,335 you stop making repayments.

Plan 2  

  • For English and Welsh students who started after 1 September 2012.

If you fit into Plan 2, you start paying your student loan back when you earn over £21,000.

If you are already studying, the earliest you will start repaying your loan is April 2016, even if you drop out.

If you started studying in September 2015 or later, the earliest you’ll start repaying your loan is the April after you leave your course.

If your income drops below £21,000 then you’ll stop the repayments.

Early Payments

There is no penalty if you want to make early payments off your loan.

How much per month do you pay?

You will pay 9% of your annual income over the amount of:

  • £17,335 for Plan 1
  • £21,000 for Plan 2

For example, if you are on Plan 1 and you earn £25,000 per annum, you will pay £61 per month in repayments for your student loan. Currently the interest rate for Plan 1 is 0.9%.

If you are on Plan 2 and you earn £25,000 per annum, you will pay £30 per month. The interest on Plan 2 depends on how much you earn:

  • £21,000 or less – interest = Inflation
  • £21,000 to £41,000 – interest = Inflation + up to 3%
  • Over £41,000 – interest = Inflation + 3%

If you are self-employed

The HMRC will work out how much you have to repay for the year and you pay this at the same time as you pay your tax bill.

More information

You can check your repayments by logging in to the Students Loan Company. Please click here if you would like more information about repaying your student loan.

Ad Valorem Accountancy Services

01908 219100

enquiries@advaloremgroup.uk

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