When do I start paying back my UK student loans?
When it comes to higher education in the United Kingdom, many students are often reliant on student loans to make it accessible for them. Currently, fees are significantly higher than they have been in the past but the emphasis made on students continuing their education has increased. More and more students are looking towards furthering their education by attending university and as a result, the demand for student loans are at a high.
Provided by The Student Loans Company in collaboration with the British government, student loans are available for students who meet a series of certain criteria and what they are given varies case-by-case. Help extends for some to living costs as well as tuition fees. Students can take out funding for both undergraduate and postgraduate courses, again which is applicable depending on a series of circumstances relative to that student.
When taking out a student loan, the recipient enters into a contract which requires them to repay the loan they receive in line with the existing terms and conditions of the contract. As a student, it is your main responsibility to ensure you provide accurate and up-to-date information regarding your circumstances.
As well as this, you have a responsibility to ensure that any changes in your circumstances are appropriately reported to ensure that you are retaining anything associated with the loans and/or repayments in line with legislation. You may be eligible for student loans including the payment of your tuition fees (this goes directly to your education provider) and maintenance loans (which will be paid directly to the student).
Paying back your loans
It is incredibly important to understand that by law, you must pay back your student loans once you have finished university. However, how this is done is dependant on your circumstances. The great thing about student loans in the United Kingdom is that they are not designed to cause you any long-term stress and therefore, a very feasible repayment system has been created to ensure that students do not feel under unnecessary pressure when it comes to this process.
Currently, three repayment plans exist which detail how and when you pay back your loan and the method differs depending on the type of course and when you started it:
Plan 1 – This is for students who started their course before the 1st of September 2012. Under this plan, you are eligible to begin paying off your fees from the April after you finish your course. Repayments begin when you’re earning above the repayment threshold of £18,935 a year, £1,577 a month or £364 a week. If at any point, your earnings drop below this, your payments will temporarily cease. Plan 2 – This applies to students who started their course after the 1st of September 2012. For full-time students, you will begin paying back the April following the end of your course. For part-time students, you will begin paying back either the April after you finish or the April four years from the beginning of your course, depending on which comes first. Like the first, you will be eligible for repayments once you breach the threshold which stands at £25,725 a year, £2,143 a month or £494 a week. If at any point your income falls below this, repayments will temporarily cease. Postgraduate Plan – For students undertaking a Master’s Degree, you will begin paying back your loan the April following your course end. For Doctoral students, it will be either the following April or four years from your course beginning. Repayments begin when you’re earning above the payment threshold which stands at £21,000 a year, £1,750 a month or £404 a week.
It should be noted that you can make voluntary additional payments at any point you desire.
The repayment system is incredibly easy and requires little to no intervention from the student beyond declaring changes of circumstances because when you begin a job, your employer will communicate with HMRC via payroll and therefore, they will automatically deduct any owed repayments from your wages before them reaching your bank. The repayments are designed to be small and circumstantial meaning that for most students, you won’t even notice you’re paying it back.