Repaying your student loan

Let's take a look at the three different Student Loan Company repayment plans, and what they mean when it comes to repaying your student loan debt.

You will fall into one of four different Student Loan Company repayment plans. Strangely, the payment plans are labelled Plan 1, Plan 2, Plan 4 and Postgraduate Loan (who knows why there's no Plan 3).

So, first things first, use the information below to determine which repayment plan you are on or will enter into.

If you fall into one of the below scenarios you are on repayment Plan 1:

• You are English or Welsh, and started an undergraduate course anywhere in the UK, before 1 September 2012.
  
• You are from the EU, and started an undergraduate course in England or Wales, on or after 1 September 1998 but before 1 September 2012.
  
• You are Northern Irish and started an undergraduate or postgraduate course anywhere in the UK, on or after 1 September 1998.
  
• You are from the EU and started an undergraduate or postgraduate course in Northern Ireland, on or after 1 September 1998.

If you fall into one of the below scenarios you are on repayment Plan 2:

• You are English or Welsh, and started an undergraduate course anywhere in the UK, on or after 1 September 2012.
  
• You are someone who took out an "Advanced Learner Loan", on or after 1 August 2013.
  
• You are from the EU, and started an undergraduate course in England or Wales, on or after 1 September 2012.
• You are someone who took out a Higher Education Short Course Loan on or after 1 September 2022

Error 404, there isn’t one (who knows why)...onto payment plan 4!

If you fall into one of the below scenarios you are on repayment Plan 4:

• You are Scottish and started an undergraduate or postgraduate course anywhere in the UK, on or after 1 September 1998.
  
• You are from the EU, and started an undergraduate or postgraduate course in Scotland, on or after 1 September 1998.

Ah yes, there is one additional plan related to Postgraduate Student Loans! If you fall into one of the below scenarios you are on a Postgraduate Loan repayment:

• You are English or Welsh, and took out a Postgraduate Masters Loan, on or after 1 August 2016.
  
• You are English or Welsh, and took out a Postgraduate Doctoral Loan, on or after 1 August 2018.
  
• You are from the EU, and started a postgraduate course, on or after 1 August 2016

Now you know which repayment plan your student loan debt falls under, let’s take a look at when you will be required to pay back the loan and how much the repayments will be.

When it comes to paying off your student loan debt, it's not just a question of "when" but also "if". The Student Loan Company recognises that to pay back your loan, you need to have some form of income, and so there is a threshold. If you never ever meet this threshold, you might not have to make any repayments.

There is also a little bit of room after your course ends before the loan repayments begin, either:

• the month of April that follows your course completion
  
• if you're studying part time, the April four years after the course started

For many students this could give you 6 – 9 months breathing room before the repayments start (if you already meet the repayment threshold).

So now onto the subject of repaying your student loan. The amount you repay varies depending on the plan you fall into and the amount you earn.

For plan 1, 2 and 4, you will pay 9% of the amount you earn over the threshold, whereas for the Postgraduate Loan, you will pay 6% of the amount you earn over the threshold.

Let's take a look at the repayment income thresholds for each plan, including your monthly payments. This part might feel a bit complicated but don’t worry, we’ve included an example.

• PLAN 1 – You are only required to make loan repayments once your income is over £388 per week or £1682 per month. If your circumstances change during the year, and your total annual income ends up being less than £20,195. You can ask for a refund of the payments you have made.
  
• PLAN 2 – You are only required to make loan repayments once your income is over £524 per week or £2274 per month. If your circumstances change during the year, and your total annual income ends up being less than £27,295. You can ask for a refund of the payments you have made.
  
• PLAN 4 – You are only required to make loan repayments once your income is over £487 per week or £2114 per month. If your circumstances change during the year, and your total annual income ends up being less than £25,375. You can ask for a refund of the payments you have made.
  
• POSTGRADUATE LOAN PLAN - If you have taken out a Master's Loan or a Doctoral Loan, you only have to make loan repayments when once your income is over £403 per week or £1750 per month. If your circumstances change during the year, and your total annual income ends up being less than £21,000. You can ask for a refund of the payments you have made.

However, do note each of the above are calculated before tax and other deductions like National Insurance. It’s also important to note that every year on April 6th, the threshold amount may change.

So, now you know the repayment plan you fall into, and the repayments you will be expected to pay, let’s take a look at how to make student loan repayments.

When it comes to your repayments, this is done automatically, the payments will be taken from you when you are paid. The Student Loan Company expects you to inform your employer of your student loan, so that they can set up the necessary processes to make the payments to the Student Loan Company on your behalf.

Now if you are self-employed, you’re expected to calculate what you should be paying and make the payment directly to HMRC through your Self-Assessment.

The Student Loan Company will likely contact you via email or letter, to ask you to update your employment details. They will want to know if you've:

• started a new job or if you are self employed
• stopped or are not working
• left the UK for more than 3 months

They need this information in order to work out when, the amount and how you should be paying. Without this they may not know your status i.e. whether you should be paying or not.

The information in this article is considered to be true and correct at the date of publication.