Repaying your Student Loan

You will start repaying your student loan when you leave University. The amount of loan you repay each year will depend on your future income and will be deducted at source by the Inland Revenue. The loan cannot be transferred to anybody else. The remaining debt will be written off if it is not cleared by you after 30 years, for students who start their courses in 2012 or later. The repayment amounts are pre-determined at 9% of the amount earned over £21,000 per annum. The repayment threshold will increase with average earnings from 2016.

Example of repayments:

Yearly Income Up to £21,000 £25,000 £30,000 £35,000 £40,000
Nil £30 £67.50 £105 £142.50

The interest payable will also depend on your future earnings. While you are studying, the interest charge will be the rate of inflation + 3%. Once you have completed the course the interest charged is shown in the table below

Yearly Income Up to £21,000 £21,000 - £41,000 £41,000 and above
Interest Rate Rate of inflation Rate of inflation and up to 3% on a sliding scale Rate of inflation and 3%
In practice if you are earning £25,000 p/a after completing your course your payslip would look something like this:

Monthly Pay Slip

* Monthly Salary £2083.33

Deductions

* National Insurance £xx

* Tax £xx

* Student Loan £30

HM Revenue & Customs will deduct your National Insurance and Tax contributions as well as the £30 repayment of your Student Loan. As repayment of the loan solely depends on your future income, it makes no difference to your monthly repayments how much your debt is, ie monthly repayments remain the same whether you take a total loan of £5,000 or £20,000.

Further information about the Partial Cancellation of the Loan for Welsh Students.

For further information about repaying your loan, including viewing your account details, how the repayment is calculated and downloading a reference guide to repaying your loan, go to The Student Loans Company .