This information provides a general awareness of the Repayment of Teachers' Loans (RTL) Scheme for both teachers and their employer or school.
The scheme is now closed to new applicants but it continues to write off the student loans of teachers already on the scheme, providing they remain eligible.
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The then Department for Education and Skills ran this scheme as a pilot - from 1 July 2002 to 30 June 2005 - to encourage teachers in England and Wales to take up posts in shortage subjects.
Teachers had to take up eligible posts by 30 June 2005 and apply to have their student loan included in the scheme by 30 November 2005 at the latest. The scheme has now closed to new applicants.
The scheme writes off the student loans of eligible teachers as long as they remain in the eligible employment. RTL income contingent loans are normally written off over ten years.
The scheme applies to teachers in schools and to teachers in further education establishments, who are employed wholly or mainly to teach one or more of the following specified shortage subjects:
The teacher must be employed in the school, college or institution on a permanent or fixed-term contract for a minimum period of one term. There must be a contract of services, which can be full-time or part-time.
The teacher must be employed in a teaching post in a maintained school, a non-maintained special school, a City Technology College, a City College for the Technology of the Arts or a City Academy in England or Wales.
The teacher must have qualified after 1 February 2002 and have gone straight into a teaching post within seven months of obtaining qualification (subject to a 12 month extension in the case of maternity absence).
The teacher must be employed in a teaching post in a further education sector institution or a special learning needs establishment in receipt of funding from either the Learning and Skills Council for England or the National Council for Education and Training for Wales, or a further education teaching post in a Higher Education Institution providing further education, in England or Wales.
The teacher must have obtained the appropriate further education teaching qualification after 1 February 2002 and have gone straight into a teaching post within seven months of obtaining qualification (subject to a 12 month extension in the case of maternity absence).
Changes in personal circumstances, particularly any change of employment or address, must be notified to the Student Loans Company immediately as it may affect entitlement. Teachers are allowed breaks from the scheme when they are not in eligible employment and they may rejoin RTL at a later date. A single break from the scheme should not exceed 12 months and scheme breaks should not exceed 36 months (or 60 months if the break is for childcare) in total. Loans are not written off during a scheme break.
Each September, the Student Loans Company will write to schools to confirm employment details of eligible individuals from the previous academic year. If the school confirms the teacher was eligible for RTL throughout the year, their student loans are written off for that year.
Where a full-time teacher has an income contingent student loan (advanced under the RTL scheme), the amount outstanding at the point of entry to the scheme, plus interest, will be written off in annual instalments over a period of up to ten years so long as the teacher remains in an eligible post. During that period, no repayments will be collected on any income earned from the eligible teaching post.
Part-time teachers will get their loans written off on a pro-rata basis to the full time equivalent hours they work.
Under the main Income Contingent Repayment Scheme, employers make student loan deductions from salary along with PAYE tax and National Insurance Contributions. The Income Contingent Repayment Scheme involves employers starting to make deductions on receipt of a Start Notice (SL1, manual Start Notice, P45 or P46 with Student Loans Statement D ticked). Student loan deductions stop when the employer receives a Stop Notice (SL2) from HMRC for the employee.
The following procedures apply for full-time employees who are accepted onto the Repayment of Teachers' Loans Scheme:
A different procedure applies when an employee who is employed part-time is accepted onto the Repayment of Teachers' Loans Scheme. The Student Loans Company gives the employee a letter for the employer asking him or her to suspend making deductions. This is not a Stop Notice and the employer records will continue to reflect the teacher as a student loan borrower. When the employee leaves the eligible part-time post the employer will complete form P45 to show a 'Y' in the Continue Student Loan Deductions box of the P45.
The borrower has to apply for eligibility to remain in the Repayment of Teachers' Loans Scheme each time he or she moves to a new part-time job. If the new part-time job is an eligible employment, the employer is given a letter from the Student Loans Company by the employee to suspend student loan deductions whilst he or she remains in that employment.
The loan amount written off each year is taxable, but the Government will meet the tax and National Insurance contribution costs on the teacher's behalf, so that the teacher will get the full value of the write-off.
If an employer has not received a stop or suspend notice for an employee who says that they have been accepted for the Repayment of Teachers’ Loans Scheme, the employer should:
Further details can be found on the Student Loans Company repayment website.
