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Student Loan Repayment

Whether you are currently in receipt of student loans or you have already graduated, knowing how student loan repayment works is very important. This page aims to help you understand the repayment system. Further information can be found on the Student Loan Company webpages at www.studentloanrepayment.co.uk.


What are repayment plans?

There are different types of repayment plans, which will establish:
- when you enter repayment
- how much you repay
- when your loan is cancelled
- the interest rate which is charged.

When you started your course(s) and the level of your course(s) will determine which repayment plan(s) you are on.

I started my course after 1 September 2012

For any undergraduate, PGCE or MBChB courses you started after the 1 September 2012 you will be on repayment plan 2. Your repayments will begin once you have left or completed your studies and will be taken directly from your salary but only if you are earning over the repayment threshold of £25,725. You will repay 9% of your income over the threshold towards your outstanding loans (maintenance and tuition fees). The table below shows how your repayments are calculated:

Annual income before tax Monthly salary Monthly repayment
Up to £25,725 £2,143 £0
£27,000 £2,250 £9
£30,000 £2,500 £32
£35,000 £2,916 £69
£40,000 £3,333 £107

You will be charged interest on your loans of RPI+3% whilst you are studying. After you have left your course the interest applied will depend on your earnings:

  • Under £25,725= RPI
  • Between £25,725 and £46,305= RPI+ up to 3%
  • Over £46,305= RPI+3%

The interest rate is updated once a year in September, using the rate of RPI from the previous March. Any outstanding loan balance will be written off 30 years after it becomes eligible to be repaid.

How do my repayments work if I started my PGCE or MBChB course in or after 2012/13 but I have a loan from a previous degree which I started prior to 2012/13?

  • The repayments of your first loan (plan 1) will begin in the April after you have left your course and are earning over £18,935. 9% of your income above £18,935 up to £25,725 will be allocated towards your first loan balance.
  • The repayment of your second loan (plan 2) will begin in the April after you have left or completed your studies and are earning over £25,725. 9% of your income above £25,725 will be allocated towards your second loan balance.

The interest currently charged on loans taken prior to 2012 is 1.75%. You will be charged interest on the loans you took out for courses commenced in 2012 of RPI+3% whilst you are studying. The interest applied after you have left your course will depend on your earnings:

  • Under £25,725= RPI
  • Between £25,725 and £46,305= RPI+ up to 3%
  • Over £46,305= RPI+3%

Any outstanding loan balance of your first loan will be written off 25 years after it becomes eligible to be repaid. For loans taken after 2012, the write off period will be 30 years. The interest rate for your plan 2 loan is updated once a year in September, using the rate of RPI from the previous March.

I have had a Postgraduate Master’s Loan and/or Doctoral Loan

If you have received a Postgraduate Loan and/or Doctoral Loan you are on repayment plan 3 for this course. If you have a Master’s Loan, your repayments will begin in the April after you have completed or left your course but only if you are earning over the repayment threshold of £21,000. However, for Doctoral Loans, you will enter repayment the April four years after the start of your course or from the April after you leave or finish your course, whichever is earlier, but again only if you are earning over the £21,000 repayment threshold. You will repay 6% of your income over the threshold towards your outstanding loan. Any outstanding loan balance will be written off 30 years after it becomes eligible to be repaid.

The interest currently charged on these loans is 6.3% (Retail Price Index (RPI) plus 3%). This will change in September based on the RPI from March of that year.

You will repay your plan 3 loan(s) in addition to any plan 1 and plan 2 repayments.

This table shows how your repayments would work if you had a loan for an undergraduate course which you started after 2012 (plan 2) and a Postgraduate loan (plan 3).

Your Income (before tax)

Monthly Plan 2 Repayment

Monthly Plan 3 Repayment

Total monthly amount paid to all loans

£21,000

£0

£0

£0

£23,000

£0

£9

£9

£25,000

£0

£19

£19

£27,000

£9

£30

£39

£30,000

£32

£45

£77

Other examples of how these repayments would work for other repayment plan combinations can be found on the Student Loans Company webpages.

What if I choose to move abroad after I leave or complete my course?

If you intend to live abroad after you leave or complete your course you will still be required to repay your Student Loan. If you plan to live abroad for more than three months, you will need to notify the Student Loans Company who will inform you of the procedure for repayment. The repayment threshold will depend on the country that you move to. For more information, see www.studentloanrepayment.co.uk.

Where can I find more information?

Further information can be found on the Student Loan Company webpages at www.studentloanrepayment.co.uk.