Savanna Hoffman
In the UK, you only need to start repaying your student loan when your income is over the threshold amount for your repayment plan, unless you've been overpaid. This threshold amount changes on 6 April every year. Postgraduate loans are written off 30 years after the April you were first due to repay. If you want to pay off your loan early, you can do so by clearing the whole debt at once or making extra repayments. However, it's important to consider any other debts you may have and whether it makes more sense to clear those first.
| Characteristics | Values |
|---|---|
| When to start repaying your student loan | When your income is over the threshold amount for your repayment plan |
| How often to repay | Monthly |
| What to do if you have 2 jobs or are self-employed | Contact the Student Loans Company (SLC) |
| How to get a refund if you've overpaid | Keep your payslips and your P60 for your records |
| What to do if you're leaving the UK for more than 3 months | Inform the SLC and provide proof of overseas income |
| When your student loan gets written off | Depends on your repayment plan; can be 25 years after the April you were first due to repay or when you turn 65 |
| How to pay off your loan in full | Contact the SLC to get your settlement amount and date, then pay by bank transfer, debit card, or cheque |
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What You'll Learn
When to start repaying
When you start repaying your student loan depends on which repayment plan you're on. For Plan 1, loans are written off 25 years after the April you were first due to repay, or when you turn 65. If you're a student from England or Wales, your Postgraduate Loan will be written off 30 years after the April you were first due to repay. If you're a postgraduate student from Northern Ireland, you're on Plan 1, and if you're a postgraduate student from Scotland, you're on Plan 4.
You'll only repay your student loan when your income is over the threshold amount for your repayment plan, unless you've been overpaid. The threshold for Plan 1 is £2,172 per month or £26,065 per year. For Plan 2, the threshold is £2,372 per month or £28,465 per year. The threshold for the Postgraduate Loan is £1,750 per month or £21,000 per year.
The threshold amounts change on 6 April every year and are usually based on the RPI inflation rate in March of the previous year. If you have multiple jobs, you'll only make repayments on the income from the job that pays you above the threshold. If you have a Plan 1 loan and you have 2 jobs, where one pays you £1,000 per month and the other pays you £800 per month, you won't have to make any repayments because neither salary is above the threshold.
If you want to pay off your loan early, you can contact the Student Loans Company (SLC) to find out your settlement amount and date. You can then pay this by bank transfer, debit card over the phone, or cheque. If you don't pay by the settlement date, you'll need to contact the SLC again to get an updated amount.
If you're leaving the UK for more than 3 months, you must inform the SLC and provide proof of your overseas income. If your income is below the threshold, you won't be expected to make repayments while abroad. If you don't inform the SLC, you may accrue arrears on your account, which you'll need to pay back on top of your regular repayments when you return.
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Repaying from overseas
If you are moving overseas, you must inform the Student Loans Company (SLC). You will be expected to continue repaying your loan unless you can provide proof that your overseas income is below the repayment threshold. If you do not inform the SLC, you will accrue arrears on your account, which will need to be paid on top of your regular repayments.
To repay your loan from overseas, you will usually set up direct debit payments directly with the SLC. You will need to provide them with proof of your income, such as a recent bank statement, and they will tell you your settlement amount and date. You can then pay by bank transfer, with your debit card over the phone, or by cheque.
The threshold for repayment changes on 6 April every year. If your income is below the threshold, you do not need to make any repayments. If your income is above the threshold, you will pay 9% of your income over this amount. For example, if the threshold is £26,065 and you earn £30,000, you will pay 9% of £3,935, or £354.15.
Your loan will be written off either 25 years after you were first due to start repaying or when you turn 65, whichever comes first.
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Loan write-offs
In the UK, the write-off of a student loan depends on the repayment plan and the country in which the student resides. For instance, in England, student loans starting in 2025 will be written off after 40 years, while in Wales and Scotland, it will be after 30 years, and in Northern Ireland, it will be after 25 years.
For students from England or Wales, postgraduate loans are written off 30 years after the April they first became due for repayment. On the other hand, postgraduate students from Northern Ireland are on Plan 1, and those from Scotland are on Plan 4.
Full-time students from Wales may be eligible to have £1,500 of their maintenance loan written off. Plan 1 loans are written off 25 years after the April the loan repayment was initially due or when the borrower reaches 65 years of age.
It is important to keep the Student Loans Company (SLC) informed about any changes in circumstances, such as leaving the UK for more than three months or updating employment details upon returning to the UK after an extended period. Failure to do so can result in accrued arrears, which must be repaid in addition to regular instalments.
Additionally, the SLC may cancel a loan in the event of the borrower's death or if the borrower claims certain disability benefits.
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Self-employed repayments
If you are self-employed, HMRC will assess how much of your student loan you should repay each year through your Self Assessment tax return. When completing your tax return, you can check a box to indicate that you have a student loan. HMRC will then inform you of the amount you need to pay. You can also use accounting software to estimate how much student loan you are liable to pay.
The type of student loan plan you are on will depend on when and where in the United Kingdom your student loan was taken out. There are currently four types of student loan plans in operation: Plan 1, Plan 2, Plan 4, and Postgraduate Loans. If you took out your student loan in England or Wales before 1 September 2012, you will repay your loan under HMRC’s Plan 1. Loans taken out after 1 September 2012 are Plan 2 Loans. Northern Ireland loans are all Plan 1. Loans taken out in Scotland up to 5 April 2021 are Plan 1 Loans, but from 6 April 2021, all existing Plan 1 Loans and any new loans are being moved to the new Plan 4 Loan rules. For Plan 1 Loans, you’ll start repaying your student loan the April after you leave your course. For Plan 2, if your earnings for the tax year fall below £27,295, you won’t need to make payments.
If you are on a full-time course, you’ll start repaying in the month of April after you finish or leave your course, but only if you’re earning over the repayment threshold. For example, if you graduate in June 2020, you’ll start repaying in April 2021, provided you are earning above the threshold. For part-time courses, you’ll be due to start repaying the April four years after the start of your course, or the month of April after you finish or leave your course, whichever comes first, but only if you’re earning over the repayment threshold.
The threshold amounts change on 6 April every year. You must update your employment details when you return to the UK after more than 3 months away. If you do not, you’ll continue repaying your loan at the rate for the country you’ve been living in. You must also tell the Student Loans Company (SLC) if you’re leaving the UK for more than 3 months and provide proof of your overseas income to avoid accruing debt on your account.
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Overpayment refunds
- Your employer has the wrong start date for your university education, resulting in you paying back a Plan 1 loan when you are actually on Plan 2, or vice versa.
- Your earnings vary throughout the year, causing you to earn over the repayment threshold in certain months, despite your total annual income being under the threshold.
- You lose your job or take leave, resulting in your income falling below the repayment threshold.
- You provide incorrect employment details to the Student Loans Company (SLC) while living overseas, leading to accrued debt or arrears on your account.
To avoid overpaying, the SLC now allows you to make your final repayments via Direct Debit. This ensures that once you have paid off your loan, deductions from your salary will stop immediately. However, if you have overpaid, you can request a refund by signing into your student loan repayment account and contacting the SLC with your customer reference number (CRN). Alternatively, you can fill out a form on the GOV.UK website or call the SLC directly. It is important to keep your payslips, P60, and other relevant records to support your refund claim.
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Frequently asked questions
Yes, you are expected to keep repaying your loan if you move abroad. You must inform the Student Loans Company (SLC) if you're leaving the UK for more than 3 months. You can make repayments directly to the SLC, usually by direct debit.
You'll start repaying your student loan when your income is over the threshold amount for your repayment plan. This is done through your employer and will be the minimum amount you need to pay back.
If you want to clear your student loan debt in one go, you can pay off your loan in full. Contact the SLC to get your settlement amount and settlement date, then pay by bank transfer, debit card over the phone, or cheque.
If you have other debts, it may be more sensible to clear those first before making extra student loan repayments.
