Douglas Olsen
If you're a student in Scotland, you'll need to know when and how to repay your student loan. The type of help you can get and how much you can borrow depends on when you started your course. Generally, you'll start repaying your student loan the April after you leave college or university, but only when your income is over the threshold amount for your repayment plan. The threshold for Plan 4 is currently £32,745 per year, and you'll pay 9% of your income over this amount towards your loan. If you're self-employed, you'll repay your loan through your self-assessment tax returns, while employed students will have repayments taken directly from their wages.
| Characteristics | Values |
|---|---|
| When do you start repaying your student loan? | You'll start repaying your student loan the April after you leave college or university, but only if your income is over the threshold amount for your repayment plan. The threshold amounts change on 6 April every year. |
| What is the threshold amount? | The current threshold is an annual salary of £26,065, £28,470, or £32,745, depending on the source. |
| How much do you pay? | You pay 9% of the income you earn over the threshold to the Student Loan Company (SLC). |
| How do you pay it back? | If you are employed, repayments will be taken from your wages. If you are self-employed, you will repay your loan through self-assessment tax returns. |
| Can you defer payments? | Yes, if your income is below the threshold (set at 85% of the national average earnings). |
| Can you pay it off early? | Yes, there is no penalty for paying off your loan early. |
| When is your student loan written off? | Your student loan will be written off 30 years after the April you were first due to repay. |
| What if you can't afford to pay? | If you can prove you are permanently unfit to work, your loan may be written off. |
| What if you took out a loan before September 1998? | The rules are different, and you can find the right organisation to contact on the Student Loans Company (SLC) website. |
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What You'll Learn
Income thresholds for repayments
The income threshold for student loan repayments in Scotland is currently £32,745 per year. This means that if your annual salary is over this amount, you will be required to make repayments on your student loan. If your salary drops below the threshold, your payments will be stopped, and they will only start again once you go over the threshold again. This is the same threshold as Plan 4, which is the plan that Scottish students who started an undergraduate or postgraduate course in the UK on or after 1 September 1998 will be on.
The income threshold for student loan repayments changes on 6 April every year and is different for each plan type. The threshold for Plan 1 is currently £2,172 per month, or £26,065 per year, while the threshold for Plan 2 is £2,372 per month, or £28,470 per year. If you have a Postgraduate Loan, the threshold is £1,750 per month, or £21,000 per year, and you will repay 6% of your income over this threshold. For Plan 4, you will repay 9% of your income over the threshold of £32,745.
If you have more than one student loan, you will repay 9% of your income over the lowest threshold out of the plan types you have. For example, if you have a Postgraduate Loan and a Plan 2 loan, with an income of £28,800 per year, you will repay 6% of your income over the Postgraduate Loan threshold and 9% of your income over the Plan 2 threshold. This would amount to a monthly repayment of £41.
If you are self-employed, your student loan repayments will be done through your Self Assessment tax return. You will need to tick the box saying that you have a student loan and budget for your student loan payments when you submit your tax return and pay HM Revenue and Customs (HMRC) at the end of January.
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Self-employed vs employed
Repaying a student loan in Scotland depends on whether you are self-employed or employed. If you are employed, your repayments will be automatically deducted from your wages, and you will see them on your wage slip. You will only make repayments if your annual salary is over the current threshold of £32,745. If your salary drops below the threshold, your payments will be stopped and will only start again once you go over the threshold.
If you are self-employed, you will need to submit your student loan repayments through your Self Assessment tax return. You will need to calculate your annual gross income, subtract the threshold that applies to you, and then calculate your student loan repayment for the year, which will be 9% of the remaining amount. You must submit your annual Self Assessment and payment by the HMRC deadline of 31 January to avoid fines or penalties.
The type of student loan plan you are on will depend on when and where you took out your loan. There are currently four types of student loan plans in operation: Plan 1, Plan 2, Plan 4, and the Postgraduate Loan. If you are a Scottish student who took out a loan on or after 1 September 1998, you will be on Plan 4. For Plan 4, the repayment threshold is £31,395 per year. For Postgraduate Loans, the repayment threshold is £18,330 per year, and deductions are at a rate of 9%.
It is important to note that your repayment amount will be the same regardless of your employment status, and student loans do not affect your credit rating. However, student loan repayments may reduce the amount of disposable income you have, which can affect the value of the mortgage you are able to secure.
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Postgraduate loan repayment
Postgraduate loans in Scotland are available for eligible students taking a taught postgraduate programme up to Masters level. For the 2025/2026 academic year, loans of up to £13,900 will be available, comprising a tuition fee loan of up to £7,000 and a living cost loan of up to £6,900. To be eligible for a postgraduate loan in Scotland, you must meet the residency requirements and have applied for the maximum student loan you are entitled to.
To qualify for a SAAS (Student Awards Agency for Scotland) postgraduate loan, you must have been a resident in the UK, Channel Islands, or Isle of Man for three years before the start of your course. You must also be a resident of Scotland on the first day of the first academic year of your course. If you are not a UK national, you must have settled or pre-settled status in the UK on the relevant date.
- You don't start repaying your postgraduate loan until the April after you graduate.
- You will repay 9% of any income you make over the current threshold of £32,745 per year.
- If you already have a Scottish undergraduate loan, your postgraduate loan debt will be added to this, and you will make a combined repayment to both loans.
- The loan will be written off after 30 years, and any remaining debt will be wiped.
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Overpayment and refunds
If you have overpaid your student loan, you may be eligible for a refund. The Student Loans Company (SLC) will write to you if you have been paid more than you are entitled to, and you must repay this separately from the rest of your student loan. You can also contact the SLC if you think you have overpaid your student loan.
To get your refund, you will need to wait until the end of the tax year and then contact the SLC again. You can also ask for a refund at the end of the tax year if your annual income was less than the yearly threshold for your plan. If your course began during or after 1998, contact the Student Loan Company on 0300 100 0611. Phone lines are open Monday to Friday from 8 am to 8 pm and 9 am to 4 pm on Saturday. If your course began before 1998, contact the SLC on the same number, and they will help you find the right organisation. If you are living or working abroad, contact the Student Loans Company on +44 141 243 3660. Phone lines are open Monday to Friday from 8 am to 8 pm and Saturday from 9 am to 4 pm.
It is important to note that you cannot get a refund on any extra repayments. This means that if you have made voluntary repayments, you will not be able to get a refund on those payments.
Additionally, if you are a student from England, Wales, or Northern Ireland, you may have different repayment plans and interest rates. Make sure to check the GOV.UK website for more information on these plans.
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Loan cancellation
Student loans can be cancelled in certain circumstances. If you took out a loan in or before the academic year 2006/07, it will be cancelled when you turn 65 or 30 years after you became eligible to repay, whichever comes first. If you took out a loan in or after the academic year 2007/08, it will be cancelled 30 years after you became eligible to repay. You become eligible to repay your student loan the April after you leave college or university.
If you are a full-time student from Wales, you may be able to get £1,500 of your Maintenance Loan written off. Plan 1 loans are written off 25 years after the April you were first due to repay, or when you turn 65. Plan 2 loans are written off 30 years after the April you were first due to repay. Plan 4 loan cancellation depends on when you were paid the first loan for your course. These loans will be written off 30 years after the April you were first due to repay, or when you turn 65, whichever comes first.
The Student Loans Company can also cancel your loan if you are permanently unfit to work due to a disability. You will need to send them medical confirmation and evidence of your disability benefit. Contact the Student Loans Company to find out what evidence they require.
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Frequently asked questions
You can pay your student loan in Scotland by paying 9% of your income over the threshold to the Student Loan Company (SLC). If you are self-employed, you will pay back your loan through your self-assessment tax returns.
You will start paying back your student loan in Scotland when your income is over the threshold amount for your repayment plan. The threshold amount changes on 6 April every year.
Yes, you can pay off your student loan in Scotland early. There is no penalty for paying off your loan early, and you can pay it off whenever you want.
