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Wednesday, 3 October 2023

Paying back your student loan: courses starting before 1 September 2023

You have to pay back your student loan (plus interest) once you complete your course and start earning more than £15,795 a year. Find out how much interest you pay on your loan and what your monthly repayments will be.

When repayments start

Courses starting after 1 September 2023

Different rules apply to repayments if your course starts after 1 September 2023

If your course started before 1 September 2023 you start paying back your student loan when you earn more than £15,795 a year.

You start making repayments from the April after leaving your course.

For example, if your course finishes in May 2014 and you get a job paying £21,000 in September 2014, your student loan repayments start in April 2015.

If your income falls below £15,795 a year, your repayments stop.

The amount you can earn before you have to start repaying your loan will go up each year in line with inflation (the retail prices index (RPI)).

Part-time students in 2011/12 don’t pay back their student finance because they can only apply for non-repayable grants.

Interest on your student loans

You’re charged interest on your loan from the first payment until the loan is paid back in full. This means the amount you pay back is more than the amount you took out in loans.

If you started a course before September 2012, from 1 September 2023 until 31 August 2023 the interest rate for will be the lower of the Retail Price Index in March 2012, or 1% above the highest base rate of a nominated group of banks. As March's RPI was 3.6%, the maximum rate of interest you will be charged between 1 September 2023 and 31 August 2023 is 3.6%.

However, due to the low interest rate cap, the rate from 1 September 2023 will be 1.5% until further notice, but that rate may vary if the bank base rate is increased or decreased.

Your monthly repayments

You pay 9 per cent of your income over £15,795.

For example, if you earn £21,000 this is £5,205 over the £15,795 threshold. You pay 9 per cent of £5,205 which is £468 per year or £39 per month.

Your income per year Monthly repayments
(including interest)
up to £15,795 no repayments
£16,000 £1.50
£21,000 £39
£25,000 £69
£30,000 £106.50
£40,000 £181.50
£50,000 £256.50
£60,000 £331.50

How you repay your loan

How you repay your student loan depends on if you’re an employee or self-employed. Remember, you only start repaying the loan when you earn more than £15,795 a year.

If you’re an employee

Your employer will calculate your repayment and take it off your salary every month along with your tax. Check your pay slip to see how much has been taken to pay your student loan.

If you haven’t worked since leaving your course or earn less than £15,795, you won’t make any repayments.

If you’re self-employed

You need to work out and make your own repayments if you earn more than £15,795 a year. This is like working out your tax and National Insurance payments.

Find out how much you owe

You will get statements each year from the Student Loans Company.

You can also check your balance on the Student Loans Company repayment website.

Repaying your loan quicker

You can make extra repayments to the Student Loans Company on top of your monthly repayments. You can make extra repayments at any time either online or by phone. You’ll need a valid credit or debit card.

Your extra repayments won’t affect the monthly repayments that are taken from you salary – these will stay the same.

Getting a refund

If you’ve been repaying your loan and your total income for that tax year was less than £15,795 you can apply for a refund. You need to send your P60 to the Student Loans Company as proof of your income. Your P60 is a form you can get from your employer, it tells you how much has been deducted from your wage for tax and student loans.

Disabled students

If you get disability benefits, these will not be counted towards the income threshold of £15,795, even if they are taxable. If you’re permanently unfit for work, your loan may be cancelled. You’ll need to provide evidence of your medical condition and your benefits. Contact the Student Loans Company to find out if your loan can be cancelled.

If you go abroad

If you go abroad for more than three months, you need to let the Student Loans Company know. You need to fill in an overseas income assessment form and give evidence of your income or means of support while you’re abroad. You’ll then be given a repayment schedule.

Back to the main page on Student finance for 2011/12

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