Repaying Student Loans
Table of Contents
As a student, you will need to pay back anything you borrow from SLC. But, the amount you repay each month will depend on your income – not the amount you borrowed!
You will not have to repay your loan until you finish your course (or leave it) and start earning over a set amount (called the ‘repayment threshold’).
Thus, earning less than the current threshold means you would not have to repay any of the loan (further details below).
You will have to repay:
Unless you received an overpayment, there is no need to pay back other kinds of student finance (e.g. bursaries, grants). Another section explains repayments of student finance if you suspend or leave your course early.
There are three repayment plans. So, the one that you are on will determine when you start to repay your loan and how much you will pay each month.
Student Loan Repayment Account Login
If you already have one, you can sign in to your student loan repayment account, to check your balance, make a one-off payment, and:
- Set up regular card payments (and amend Direct Debits).
- Notify the Student Loans Company (SLC) about a change to your contact details.
Note: The information found in this student loan repayment guide is also available in Welsh language (Cymraeg) on the GOV.UK website.
When You Start Repaying Your Student Loan
The repayment plan that you are on will determine when you start to repay your student loan (and finish it). The three types of student loan plans are:
- Plan 1
- Plan 2
- Postgraduate Loan
You will not need to make any repayments until your income goes over the threshold amount for the plan you are on. But, it is important to be aware that the threshold amounts change every year (on the 6th of April).
Even so, your repayments would stop by automatic process if your income drops below the threshold, or you stop working altogether.
Note: You do not get to choose the repayment plan yourself. Furthermore, having more than one loan could mean you will be on several different plans.
Student Loan Plan 1 Explained
As a rule, you will be placed on Plan 1 if you are (either):
- An English or Welsh student who started their undergraduate course before the 1st of September 2012 anywhere in the United Kingdom.
- A Scottish or Northern Irish student who started their undergraduate or postgraduate course since the 1st of September 1998 anywhere in the United Kingdom.
- An EU student who started their undergraduate course in England or Wales since 1st of September 1998 (but before the 1st of September 2012).
- An EU student who started their undergraduate or postgraduate course in Scotland or Northern Ireland since the 1st of September 1998.
So, being on Plan 1 means the earliest you will start to make repayments will either be:
- The first April after leaving your course.
- The first April four (4) years after the course started (for students who are studying on a part-time basis).
Note: Based on repaying student loans 2022/23, you will only repay when your income goes over £388 a week or £1,682 a month (before tax and any other relevant deductions).
Writing Off Plan 1 Loans (England, Wales, Northern Ireland)
- Taking out the loan in the academic year in 2005 to 2006 (or earlier) means the loan would be written off when you reach the age of 65.
- Taking out the loan in the academic year in 2006 to 2007 (or later) means the loan would be written off 25 years after the April when the first repayment was due.
Note: Full-time students who have taken out a Maintenance Loan from Student Finance Wales can get up to £1,500 written off (i.e. through the Welsh partial loan cancellation scheme).
Writing Off Plan 1 Loans (Scotland)
- Taking out the loan in the academic year in 2006 to 2007 (or earlier) means the loan would be written off when you reach the age of 65 or 30 years after the April when the first repayment was due (whichever occurs first).
- Taking out the loan in the academic year in 2007 to 2008 (or later) means the loan would be written off 30 years after the April when the first repayment was due.
Writing Off Plan 1 Loans for Postgraduates (Scotland, Northern Ireland)
Likewise, Doctoral Loans and Master’s Loans do not get written off until 30 years after the April when the first repayment was due.
Student Loan Plan 2 Explained
As a rule, you will be placed on Plan 2 if you are (either):
- An English or Welsh student who started their undergraduate course since the 1st of September 2012 anywhere in the United Kingdom.
- An EU student who started their undergraduate course since the 1st of September 2012 in England or Wales.
- A student who took out an Advanced Learner Loan since the 1st of August 2013.
So, being on Plan 2 means the earliest you will start to make repayments will either be:
- The first April after leaving your course.
- The first April four (4) years after the course started (for students who are studying on a part-time basis).
Note: Based on repaying student loans 2022/23, you will only repay when your income goes over £524 a week or £2,274 a month (before tax and any other relevant deductions).
Writing Off Plan 2 Loans
Plan 2 student loans do not get written off until 30 years after the April when the first repayment was due.
Note: Full-time students who have taken out a Maintenance Loan from Student Finance Wales can get up to £1,500 written off.
Postgraduate Loan Repayment Plan Explained
As a rule, you will be placed on a Postgraduate Loan plan if you are (either):
- An English or Welsh student who took out their Postgraduate Master’s Loan since the 1st of August 2016.
- An English or Welsh student who took out their Postgraduate Doctoral Loan since the 1st of August 2018.
- An EU student who started their postgraduate course since the 1st of August 2016.
After taking out a Master’s Loan, the earliest you would start making repayments would be the April after leaving your course. You will only repay when your income goes over £403 a week or £1,750 a month.
After taking out a Doctoral loan, the earliest you would start repaying is:
- The first April after leaving your course.
- The first April four (4) years after the course started (for students who are studying on a part-time basis).
You will only repay when your income goes over £403 a week or £1,750 a month (before tax and other deductions).
Note: Taking out a Postgraduate Tuition Fee Loan in Northern Ireland, or a Postgraduate Living Cost Loan in Scotland, means you would need to repay them according to Student Loan Plan 1.
Writing Off Postgraduate Loans
Similarly, Master’s Loans and Doctoral Loans do not get written off until 30 years after the April when the first repayment was due.
Note: You receive notification from the Student Loans Company (SLC) when you get close to repaying all of the loan.
Student Loan Cancellation (if the customer dies)
You must contact the Student Loans Company (SLC) to inform them about someone who has died so they can cancel the deceased person’s student loan. SLC will need some evidence from you, such as:
- An original death certificate.
- The deceased person’s Customer Reference Number.
Student Loan Cancellation (permanently unfit to work)
As a rule, you can cancel your student loan if you are no longer able to work (e.g. permanently unfit to work due to a disability or illness). SLC will need some evidence from you, including.
- A letter from the benefits agency.
- Your Customer Reference Number.
Note: See the video below to check what happens when you finish your course and start repaying your student loan.
Student Loan Monthly Payment Rates
The method that you use to repay your student loan will depend on whether you are employed or self-employed (e.g. working for yourself).
You will be able to make voluntary repayments in your online account and by credit card, bank transfer, or by cheque.
It is important to keep some records, such as your payslips and PAYE forms (e.g. P60). You would need them to claim a refund.
The amount you repay will depend on which plan you get placed on and how the threshold applies to your weekly or monthly income. For example, you will repay:
- 9% of the amount earned above the threshold for Plan 1 and Plan 2.
- 6% of the amount earned above the threshold for the Postgraduate Loan.
- 15% of the amount earned above the threshold if you have either a Plan 1 or Plan 2 loan along with a Postgraduate Loan.
Note: There will be nothing to pay back while your income is below the repayment threshold. But, SLC will add interest to the loan from the date you get your first payment.
Plan 1 Payments and Interest
The 2022/23 repayment thresholds for Plan 1 are £388 a week or £1,682 a month (before tax and any other deductions). The amounts change on the 6th of April every year.
Currently, the interest charged on Plan 1 is 1.5%. The GOV.UK website has further guidance on how the interest is calculated and applied to Plan 1 student loans.
Plan 2 Payments and Interest
The 2022/23 repayment thresholds for Plan 2 are £524 a week or £2,274 a month (before tax and any other deductions). The amounts change on the 6th of April every year.
During the time you are studying, the interest rate charged is 4.5%. It combines the Retail Price Index (RPI 1.4%) plus an extra 3%.
This rate would apply until (either):
- The 5th of April after you have finished or left the course.
- The first four (4) years of the course (for part-time courses – unless the RPI changes).
Note: Following that, the interest rate will depend on your household income for the current tax year.
As a self-employed worker, your income will be the total income amount stated on your Self-Assessment form. As an employee, your income will be your taxable pay:
- Plus any pension contributions.
- Minus any benefits received from your employer taxed through payroll (your employer can confirm this amount).
What if you have more than one job in a tax year? In this case, the interest rate will be based on the combined income from all your jobs.
- Annual income £27,295 (or less): Interest rate is RPI (currently 1.5%)
- Annual income £27,296 to £49,130: Interest rate is RPI plus up to 3%
- Annual income over £49,130: Interest rate is RPI plus 3%
The GOV.UK website has further guidance on how the interest is calculated and applied to Plan 2 student loans.
Note: You must keep your contact details in your online account current and accurate (and supply any evidence if SLC ask for it). Failing to do so may mean you get charged the higher rate of interest rate (even if your income is lower).
Repayments for Plan 1 and 2 Loans
If you have Plan 1 and Plan 2 loans, you would repay 9% of your income above the threshold of Plan 1. But, the repayments would only go towards the Plan 1 loan if your income is below the Plan 2 threshold.
Furthermore, your repayments would go towards both of your loans if your income is above the Plan 2 threshold.
Postgraduate Loan Payment and Interest
The Postgraduate Loan thresholds are 403 a week or £1,750 a month. But, you must repay them under Plan 1 if you took out either a Postgraduate Tuition Fee Loan in Northern Ireland or a Postgraduate Living Cost Loan in Scotland.
Interest rate charged on Postgraduate Loans is currently 4.5% (the RPI plus 3%). The GOV.UK website has further guidance on how the interest is calculated and applied to a Postgraduate Loan from England or Wales.
Having a Postgraduate Loan and a Plan 1 or 2 Loan
If you have secured a Postgraduate Loan with either a Plan 1 or Plan 2 loan, you would need to repay 6% of your income above the Postgraduate Loan threshold. Besides that, you would also pay back 9% of your income over the threshold for Plan 1 or Plan 2.
What if Your Income Changes During the Year?
It would not be uncommon for your income to change during the year. If so, you can ask for a refund if you are making repayments and your total annual income (from the 6th of April to the following 5th of April) is less than:
- £20,195 a year for Plan 1
- £27,295 a year for Plan 2
- £25,375 a year for Plan 4
- £21,000 for Postgraduate Loans
Note: In June 2021, the Department for Education (DfE) announced changes to maximum Plan 2 and the Plan 3 student loan interest rates.
If You are Employed with 2 Jobs (or more)
Being employed means your repayments will be taken from your salary. But, the repayments would be from the jobs where you are earning above the minimum amount (not your combined income).
Sending a Self Assessment Tax Return
HM Revenue and Customs (HMRC) will be able to calculate how much you are repaying from your Self Assessment tax returns.
Repayments will be based on your income for the full year. HMRC will deduct them from the amount you need to repay if you already made repayments from a salary.
Note: The short YouTube video presented by Student Finance England (SFE) explains more about what happens when you finish your course and start to repay your student loan.
How to Make Your Monthly Repayment
As an employee, you will have tax and National Insurance taken out of your salary at the same time as your repayments.
You will see the deductions on your payslips. So, your employer will need to know which of the plans you are on.
Note: Remember, you will not start repaying until your income goes over the minimum amount. You can make voluntary repayments without any penalties if you want to pay off some or all the loan early.
If You Become Self-employed
HM Revenue and Customs (HMRC) use your tax return to work out how much you need to pay. You would make any payments owing at the same time as you pay your Self Assessment tax bill.
Employees Who Send in Tax Returns
Your employer is going to deduct loan repayments from your salary if you earn over the minimum amount (as an employee doing a tax return).
Your payslips (or P60) will show how much you have paid off the student loan during the tax year. You will need to include this information when you complete your tax return.
Checking Your Student Loan Repayments
You will be able to see any repayments that you made, and the remaining balance, in (both):
- Your student loan repayment account (online)
- The annual statements you receive from the Student Loan Company (SLC)
Note: It is important to understand that the tax year runs from the 6th of April to the 5th of April in the following year in the United Kingdom.
Going Abroad for more than 3 Months
You must notify the Student Loans Company (SLC) if you leave the United Kingdom for a period of more than three (3) months. They can then work out whether you need to make repayments while you are overseas – and how much you need to pay.
There will be different repayment thresholds for each country. But, the rules for making repayments are the same as in the United Kingdom.
During the time you spend abroad, repayment amounts will be based on:
- Overseas earnings thresholds for Plan 1 student loans.
- Overseas earnings thresholds for Plan 2 student loans.
- Overseas earnings thresholds for postgraduate student loans.
Note: You must keep your contact details up-to-date and accurate. Use your online account to update any change in circumstances.
How to Make Voluntary Repayments
You can choose to make voluntary repayments directly to SLC to pay off your student loan early (without penalty). They would be in addition to the usual repayments made through salary or tax returns.
There are several ways to apply a voluntary repayment to your loan, such as:
- Using it to pay off any repayments that are overdue.
- Reducing the balance of a specific plan (e.g. if you are on more than one).
Note: The Student Loans Company (SLC) will decide how repayments are applied to your balance unless you make the choice yourself.
Paying Online
Once you sign in to your online account you will be able to:
- Make a repayment (using either a valid international or UK debit card).
- Set up a direct debit.
Note: You can also use the website portal to make an online repayment without actually signing in to an account. It allows you to make a card repayment towards your own loan or for someone else (providing you have their surname and customer reference number).
Paying by Bank Transfer or Cheque.
Use these details to make a voluntary repayment by a bank transfer or by standing order (or to set-up a standing order from a UK bank account):
Student Loans Company
Sort code: 60 70 80
Account number: 10027254
Use these details to transfer money from a non-UK bank account:
IBAN: GB37NWBK60708010027254
SWIFT: NWBKGB2L
NatWest Government Banking Services Branch
2nd Floor
280 Bishopsgate
London
EC2M 4RB
Use one of these as a reference for all bank transfers and standing orders:
- Customer reference number
- Loan account number (for a specific loan)
- Grant reference number (for a grant overpayment)
Paying by Cheque
You should make the cheque payable to ‘Student Loans Company Ltd’ and write the appropriate customer reference number on the back.
Student Loans Company Ltd
Finance Department
100 Bothwell Street
Glasgow
G2 7JD
Paying Off a Loan in Full
You can pay your loan off in full (by debit card, bank transfer or cheque) after calling the Student Loan Company to find out:
- The ‘settlement amount’ (the total amount that you owe)
- The ‘settlement date’ (the date that you need to pay it by)
You will need to supply some documentation, such as (either):
- Your P60 and payslips for the current tax year.
- The details of your most recent student loan calculation (if paying through Self Assessment).
The Student Loans Company
Telephone: 0300 100 0611 (England, Northern Ireland or Scotland)
Telephone: +44 (0)141 243 3660 (outside the UK)
Monday to Friday: 8am to 8pm
Saturday: 9am to 4pm
Telephone: 0300 100 0370 (Wales)
Monday to Friday: 8am to 6pm
Information on call charges
Important: Failing to pay the settlement amount by the settlement date means you would have to call SLC again. The amount owing may have changed. But, you would only need to supply recent payslips or calculations since the last time you called.
How to Get a Student Loan Refund
There are several reasons for getting a refund on a student loan, such as if:
- You paid an amount over your outstanding student loan balance.
- You made repayments sooner than you needed to.
- Your annual income was under the repayment threshold.
Note: The Student Loans Company (SLC) will not give a refund on any voluntary repayments.
Paying more than the Outstanding Balance
You can ask for a refund if you believe you repaid your student loan in full and your employer carried on making deductions from your salary.
In this case, the Student Loans Company (SLC) will contact HM Revenue and Customs and ask them to notify your employer. You should allow up to four (4) weeks for the deductions to stop being taken from your salary.
Started Repaying before Necessary
You can ask SLC for a refund if a deduction from your salary occurs before your due date for making repayments.
Annual Income below the Threshold
The Student Loans Company make refunds on repayments if your income over the full tax year was less than:
- £20,195 a year for Plan 1
- £27,295 a year for Plan 2
- £25,375 a year for Plan 4
- £21,000 a year for Postgraduate Loan
In some cases, your annual salary may be less and your employer might still deduct repayments (e.g. if you get paid overtime or a bonus).
The rules change for students who are repaying both a Plan 1 and a Plan 2 loan. In this case, you would only get a refund if your income was under £18,935.
SLC provide extra guidance on all previous annual repayment thresholds for Plan 1 and Plan 2 student loans.
Note: You need to give the Student Loans Company (details above) your customer reference number when you ask for a refund.
How to Update Your Employment Details
You will need to update your employment details if the Student Loans Company (SLC) sends you a letter asking you to, or any time you:
- Leave the United Kingdom for a period over three (3) months.
- Start a new job (or start working for yourself).
- Stop working altogether.
Note: SLC use this information to calculate whether you should be repaying your loan. Hence, you could get a higher interest rate if you fail to keep your details current.