Repayments will be automatically deducted from your income through the tax system from the April after you complete or leave the course and your income is more than £21,000 a year.
When will repayments start?
Repayments via the tax system will start from April 2016 and there’s no need to repay until then.
You can make voluntary repayments direct to SLC at any time and before April 2017 in order to accrue less interest and pay off your loan more quickly.
If you leave your course after April 2016 then repayments will start from the following April and when your income is more than £404 a week, £1,750 a month or £21,000 a year.
How much will the repayment be?
Repayments will be made at 9 per cent of your income over £404 a week, £1,750 a month or £21,000 a year. For example, if your income is £25,000 a year then your loan repayments would be around £360 a year or £30 a month. The repayments are based purely on income, not on the amount borrowed or number of loans. So, regardless of how much you owe, the repayments will be the same. If your income falls below £21,000, repayments will stop and only re-start when your income increases to more than £21,000.
You’ll make a single payment and deduction at 9 per cent of your income over the threshold above, regardless of how large or how many student loans you have, including HE and 24+ Advanced Learning Loans.
How do I repay the loan early?
Voluntary repayments can be paid to the Student Loans Company at any point after you finish your study. You do not need to wait until you earn over £21,000. Any early repayment, either partial or fully, will reduce the interest that will accrue. You should seek independent advice regarding your finances if you plan to offset a substantial amount against your loan balance in one or a few transactions.
What happens if I can’t repay the entire loan?
You’ll only ever have to make repayments in line with your income if you earn more than £21,000. Any loan balances which remain after 30 years will be written off
How much will I repay?
|INCOME EACH YEAR||MONTHLY INCOME||MONTHLY REPAYMENT|
|Up to £21,000||£1,750||£0|
How much interest will I be charged?
|While you're studying and until the April after you complete or leave your course, whichever comes first.||Retail Price Index (RPI) plus 3%|
|If you complete or leave your course before April 2016||RPI plus 3% until the April after yu leave your course then RPI until April 2016|
|From April 2016||Interest will be based on your income.
£21,000 or less - RPI
£21,000 - £41,000 - RPI plus up to 3%, depending on income
£41,000 and over - RPI plus 3%
Source: Department for Business, Innovation & Skills, 2013