You’ll apply for student finance from Student Finance England when you’re at uni or college. But when the time comes to repay, you’ll make your repayments to the Student Loans Company (SLC).
Courses started before 1 September 2012
If you started your course before 1 September 2012, or have studied courses which started before and after 1 September 2012, take a look at the Student Loans Company's repayment website for information on repayment.
How much do I repay?
The important thing to remember is that the amount you’ll repay will be based on how much you earn, not how much you borrow.
Once you leave your course, you’ll only repay when your income is above the repayment threshold. The current UK threshold is £25,000 a year, £2,083 a month, or £480 a week.
For example, if you earn £2,250 a month before tax, you’ll repay £15. This is because £2,250 is £167 above the threshold, and 9% of £167 is £15.
This table gives some further examples of how much you could repay.
|Yearly income before tax||Monthly income before tax||Monthly repayment|
If you stop working, or start to earn below the repayment threshold, you’ll repay nothing at all until you earn over the threshold.
You’ll make a repayment if you go over the weekly or monthly threshold at any point during the year, for example, if you get a bonus or work overtime. You can request a refund at the end of the tax year if your total income was below the repayment threshold.
If you leave your course early
You’ll still have to repay your loan, but the repayment process might be different.
How and when do I repay?
- Full-time courses – you’ll be due to start repaying the April after you finish or leave your course, and your income is over the repayment threshold. For example, if you graduate in June 2019, you’ll be due to start repaying in April 2020.
- Part-time courses – you’ll be due to start repaying when you’re earning over the repayment threshold, the April four years after the start of your course, or the April after you finish or leave your course, whichever comes first.
How you'll repay depends on what you choose to do after your course:
- If you start work, your employer will automatically take 9% of your income above the threshold from your salary, along with tax and National Insurance.
- If you're self-employed, you’ll make repayments at the same time as you pay tax through self-assessment.
- If you move overseas, you’ll repay directly to the Student Loans Company, instead of having it taken automatically from your pay. To reflect differences in the cost of living, the repayment threshold could be different from the UK threshold. Go to www.studentloanrepayment.co.uk to see the thresholds for different countries. Before you leave the UK, you should complete an Overseas Income Assessment form.
What about interest?
Interest is charged from the day the Student Loans Company makes your first payment to you or your uni or college, until your loan is repaid in full or cancelled.
The interest rate is based on the UK Retail Price Index (RPI), which measures changes to the cost of living in the UK. The interest rate is updated once a year in September, using the RPI from March of that year.
How much interest you're charged depends on your circumstances:
- When you're at uni or college – while you're studying, up until the April after you leave your course, the interest charged will be RPI plus 3%.
- When you've left your course – from the April after you've left your course, interest will be based on your income, up to a maximum of RPI plus 3%.
- If you don't keep your details up-to-date – you'll be charged RPI plus 3%, whatever your income, until the Student Loans Company has all the information they need.