Student loan repayment
Repayments are based on future income, not what you borrow
You won't have to repay your loan until you've left university or college and your income is over a certain amount. Grants and bursaries don't have to be repaid unless you leave your course early or there has been an overpayment.
Repayment for new students
If you're a new full-time student starting from September 2013 you won't have to repay anything towards your student loans until April 2016, even if you leave your course early. Any bursaries and grants don't have to be paid back, unless you leave your course early or there has been an overpayment.
If you're a new part-time student, your repayments will become due at the start of the tax year on 6 April, four years after the first day of your first year of study or the April after you leave the course (whichever happens sooner).
The start date of your repayments also depends on your income. New students starting in September 2014 only have to start repaying their student loan when their income is over £21, 000 each year. Once you're earning over £21, 000 you'll pay 9% on everything you earn over this amount. For example, if your income is £25, 000 a year you'll pay 9% on £4, 000. This means you'd repay £360 a year (or £30 a month).
The amount you have to pay back depends on your income, not what you've borrowed. If your income drops below £21, 000 (or £1, 750 a month) then repayments will stop.
Your monthly payments
|Your income per year||Monthly repayments|
|£21, 000 and under||no repayments|
Repayment for students who started their course before 1 September 2012
If you started your course before 1 September 2012 you'll start paying back your student loans the April after you leave university or college. Any bursaries or grants don't have to be paid back unless there has been an overpayment.
Students who started their course before 1 September 2012 will start repaying their student loan when they've left university or college and their income is over £16, 910 each year.
Once you're earning over £16, 910 you'll pay 9% on everything over this amount. So, if your income is £18, 000 a year you'll pay 9% on £1, 090. This means you'd repay £8 a month.
The amount you pay back each month will depend on your income NOT what you've borrowed. If your income drops below £16, 910 a year then all repayments will stop.
How you pay back your loan
If you're an employee then your employer will calculate your repayments and deduct it from your earnings along with your tax and National Insurance payments each month.
If you’re self-employed you have to work out your own repayments in the same way you would have to work out your tax and National Insurance payments.
If you move abroad for more than three months you must inform the Student Loans Company. They'll ask to you fill in an Overseas Income Assessment form and, based on this information, will give you a repayment schedule if your income is over the appropriate repayment threshold. You still have to repay your student loans even if you live abroad.
Interest on your student loan
You're charged interest on your loan from the time your first payment is made by SFE until you pay back your loan in full. The interest rate charged depends on the Retail Prices Index (RPI).
If you started your course before 1 September 2012 the interest rate on your loan will be fixed at RPI or the Bank Base Rate plus 1%, where the Bank Base Rate is lower than RPI.