Students: Repayments: how, when and how much will I pay
HM Revenue & Customs collects repayments on student loans taken out after August 1998.
You can find out more about how to repay your loan on the Student Loan Company.
If you have taken out a student loan after August 1998 read on:
Start date
The earliest your repayments will start is the 6 April after you leave your
course.
Starting limit
Your income needs to be £15,000 a year (£1,250 a month or £288
a week) before repayments start. You will not have to make repayments until
your income reaches £15,000 a year.
Amount due
Usually the amount you will pay back is calculated as 9% of your income
over the starting limit. If you're working and you get more than £2,000
interest a year from your savings it may affect how much you have to repay.
If you don't fill in a tax return, you should ring the SLC on 0800 40 50
10 to let them know about your savings income.
If you have a job
We will tell your employer when to start making deductions from your wages.
Your employer will make deductions each pay day.
Making repayments
As each pay day is looked at separately, your repayments may vary according
to how much you have been paid in that week or month. If your income falls
below the starting limit for that week/month, your employer should not make
a deduction.
There is also a way to pay your loan off quicker, as well as having repayments deducted by your employer. You can make voluntary repayments of £5.00 or more direct to the Student Loans Company yourself, at any time, even if you do not earn above the threshold.
You can do this by sending a cheque to SLC, telling them your name and student reference number. If you do choose to make voluntary payments it will not stop your employer making deductions from your pay for the balance of your loan, but your employer will stop making deductions sooner.
You can get more information by contacting the SLC.
If you work for yourself and/or have to complete a tax return
You should tick the relevant box on your tax return to indicate that you
are a student loan borrower. This will ensure that your student loan repayment
is calculated with your overall bill. You should normally pay your bill
by the 31 January each year.
Example
You leave college/university in June 2005 and start working in August 2005 earning £1500 a month (£18,000 a year).
Your repayments don't start until April 2006.
- income in April £1500 - Starting limit £1250 = £250
- £250 x 9% = £22 repaid in April.
