Note: This article hasn’t been translated into Scots yet. The English version is shown below.
After you leave higher education, you start repaying your loan to the Student Loans Company (SLC). The SLC handles all repayments, no matter which part of the UK you studied in.
How much you pay and when you start depends on your repayment plan. You repay a percentage of what you earn over a threshold, not a fixed amount. If your income drops below the threshold, your repayments stop until it goes back up.
Use the student loan repayment calculator to estimate how long it will take you to clear your loan, or whether it will be written off first.
What you pay back
You pay back:
- the Tuition Fee Loan
- the Maintenance Loan for living costs
- any postgraduate loans, for example a Master’s Loan or Doctoral Loan
You do not pay back grants or bursaries.
You still have to repay your loan if you leave your course early.
When you start repaying
The earliest you start repaying is the April after you finish or leave your course. If you study part-time and your course is longer than four years, you start the April four years after the course began.
If you have more than one loan, each can have its own repayment start date. For example, if you started a course, stopped, then started a new one, the loans for each course are repaid separately even if they are on the same plan.
You only repay when your income is over the threshold for your plan. Income means what you earn before tax and other deductions, including bonuses and overtime.
How you repay
How you repay depends on how you are paid.
If you are employed
Your employer takes repayments from your salary at the same time as tax and National Insurance. You will see the amount on your payslip.
This is why student loans are sometimes described as a ‘graduate tax’. You only pay when you earn over the threshold, and the money comes out of your pay automatically.
Check that your employer has you on the correct repayment plan, especially when you start a new job.
If you are self-employed
If you fill in a Self Assessment tax return, HM Revenue and Customs (HMRC) works out how much you repay based on your income for the whole year. You pay at the same time as your tax bill.
If you are both employed and self-employed, HMRC uses your combined income. Anything your employer has already taken from your salary is deducted from the total.
Keep your payslips and your P60. You will need them if you ever need to claim a refund.
How much you repay
You repay a percentage of your income over the threshold for your plan. The total amount you owe has no effect on your monthly repayment.
| Plan | Yearly threshold | Monthly threshold | Repayment rate |
|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | 9% |
| Plan 2 | £29,385 | £2,448 | 9% |
| Plan 4 | £33,795 | £2,816 | 9% |
| Plan 5 | £25,000 | £2,083 | 9% |
| Postgraduate Loan | £21,000 | £1,750 | 6% |
For example, if you are on Plan 2 and earn £35,000 a year (£2,917 a month), you pay 9% of £469, which is about £42 a month.
The thresholds are reviewed each April. Some have been frozen in recent years, which means more graduates fall above them as wages rise.
If you have a Postgraduate Loan and another plan, you pay 6% over the postgraduate threshold and 9% over the threshold for your other plan, on top of each other.
Interest
Interest is added to your loan from the day you take it out, even when you are not earning enough to repay. The rate depends on your plan:
- Plan 1, 4 and 5: 3.2%
- Postgraduate Loan: 6.2%
- Plan 2: between 3.2% and 6.2%, based on your income
When your loan is written off
Your loan is written off after a set number of years, even if you have not paid it back in full. The number of years depends on your plan:
- Plan 1: 25 years after the April you were first due to repay (or at age 65 for older loans)
- Plan 2: 30 years after the April you were first due to repay
- Plan 4: 30 years after the April you were first due to repay (or at age 65 for older loans)
- Plan 5: 40 years after the April you were first due to repay
- Postgraduate Loan: 30 years after the April you were first due to repay
Your loan is also cancelled if you die, or if you can no longer work because of permanent illness or disability and claim certain benefits. The SLC needs evidence and your customer reference number.