Repayment of student loans

Source: HM Revenue & Customs | | 25/10/2018

Students that have finished their studies and entered the workforce, must begin to make loan repayments from the April after they have finished their studies or when their income begins to exceed the annual threshold.

The annual threshold amounts for 2019-20 have been confirmed by the Department of Education. The thresholds will increase to £18,935 (2018-19: £18,330) for plan 1 and to £25,725 (2018-19: £25,000) for plan 2.

The terms of loan repayment for courses of study started before 01 September 2012 are referred to as 'Plan 1', and those started after 01 September 2012, are referred to as 'Plan 2'. Repayments are deducted at a rate of 9% of income over the threshold.

The loans are also subject to varying levels of interest. The interest rates for Plan 2 repayments are based on the Retail Prices Index plus a variable rate dependent on income. The interest rates for Plan 1 repayments are significantly lower than for Plan 2 repayments.

Student Loans are part of the government’s financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying, and it is HMRC’s responsibility to collect repayments where the borrower is working in the UK.

The Student Loans Company (SLC) is directly responsible for collecting the loans of borrowers outside the UK tax system. Maintenance grants are also available under certain circumstances. The grants do not have to be repaid but do reduce the amount of maintenance loan a student is entitled to.



Contact Us

8-10 Queen Street
Seaton
Devon
EX12 2NY
Tel: 01297 624188

Also in Exeter

13 West Street
Exeter
Devon
EX1 1BB
Tel: 01392 823999

 

Cookie Policy

Latest News

Auto-enrolment qualifying earnings band figures for tax year 2019/20 confirmed
22/01/2019 - More...
The draft Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2019 has now been published. As

Statutory payment rates for tax year 2019/20 confirmed
22/01/2019 - More...
The following statutory payment rates are confirmed: The standard weekly rates of Statutory Adoption Pay (SAP),

EU Settlement Scheme fee is to be scrapped
22/01/2019 - More...
The Prime Minister has announced in a speech to the House of Commons that the £65 fee for applications made by EU

News Search


Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the newsletter
» Login