Undergraduate finance

Student loan repayments

Students from England, Wales and the EU (Plan 2)

The amount paid each month will depend on the graduates earnings, with repayment set at 9% of the gross salary over £21,000. For example, if you earn £25,000 pa you will pay £30 per month.

  • ONLY START PAYING BACK WHEN EARNING OVER £21,000 pa.  (This repayment threshold has been frozen until April 2021).
  • Repayments start in the April following graduation.
  • Payments will be deducted directly from salary by your employer in the same way as income tax.
  • If a student goes on to be self employed as a graduate, the repayment amount is calculated by self-assessment and paid directly to the HMRC.
  • If your salary falls below £21,000 for any reason, such as a career break, or part-time working, repayments will stop.
  • The loan, if not repaid, will be written off after 30 years. 

Rates of interest - England, Wales and the EU

  • Interest on your loan will be applied at inflation (Retail Price Index - RPI) plus 3% while you are studying and up to the April after you leave university.
  • From then, if you are earning below £21,000 interest will be applied at the rate of inflation.
  • Once you are earning between £21,000 and £41,000 interest will be applied between RPI and RPI plus 3% on a scale depending on income.
  • For graduates earning over £41,000 interest will be applied at RPI plus 3%.

Students from Scotland and Northern Ireland (Plan 1)

The amount paid each month will depend on the graduates earnings, with repayment set at 9% of the gross salary over £17,775. For example, if you earn £21,000pa you will pay £24 per month.

  • Start paying back when earning over £17,775 pa.  
  • Repayments start in the April following graduation.
  • Payments will be deducted directly from salary by your employer in the same way as income tax.
  • If a student goes on to be self employed as a graduate, the repayment amount is calculated by self-assessment and paid directly to the HMRC.
  • If your salary falls below £17,775 for any reason, such as a career break, or part-time working, repayments will stop.
  • The loan, if not repaid, will be written off after 25 years.

Rates of interest - Scotland and Northern Ireland

The current interest rate for plan 1 income contingent repayment loans is 1.25%.

More information on student loan repayments can be found at: www.studentloanrepayment.co.uk/ 

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