Repaying your student loan

By Georgia Lavender

If you’ve just got to the end of your course and are starting to worry about paying back your student loan, Don’t Panic Yet! No payments start until at least next April! Keep reading to refresh your memory on exactly how repayments work.

There are a few different repayment plans, but English students who are graduating this year most likely started their studies before July 2023, and will therefore be on Plan 2. On Plan 2, your repayments will only start once you are earning over the repayment threshold, which is currently set at £28,470 per year. Payments also don’t start until the new tax year, which as I said at the start, is the April after you graduate. Other payment plans have different thresholds, take a look at the government websiteLink opens in a new window to check which one applies to you.

For most people, you will not actually have to do anything to make repayments. If you are an employee at a company, then your repayments will be taken out of your pay through the tax system automatically. If you're self-employed or leave the country then you will need to set up repayments manually with the Student Loans Company (SLC), see their Repaying Your Student Loan article for more details on their websiteLink opens in a new window.

Repayments for student loans are structured more like a tax than a debt, which means they will never show up on your credit file. The repayments will also never be based on how much you owe, but always on how much you are earning, set at 9% of anything earned above the threshold. Interest is added to what you owe. This is based on RPI, and for a Plan 2 loan is currently between 4.3% and 7.3% depending on how much you are earning. The SLC set interest rates annually in August, so check their webpage to find out the latest interest ratesLink opens in a new window. However, any remaining balance or interest remaining after 30 years is wiped for Plan 2 loans, meaning many graduates will never have to repay everything they borrowed.

If you want to find out more, or check the details for a different repayment plan, visit the gov.uk website for repaying your student loan.Link opens in a new window

If you have any other questions or concerns about your student loan or finances at university, Student Funding Support is here to help. Contact us by email (studentfunding@warwick.ac.uk), phone (024 7615 0096), or come to the Wellbeing Reception in Senate House (10 am-3 pm Monday-Friday).