What, when and how to repay

You might not be thinking about how you’ll repay your student loan right now, but it’s really important you understand exactly how it works for when the time comes to repay.

How much do I repay?

You’ll have to repay any loans you borrow, but it works a bit differently than you might expect. How much you repay each month depends on your income, not how much you borrowed.

You won’t have to repay anything until you’re earning over a certain amount, which is currently £27,295 a year. If you earn less than that, you won’t have to repay anything. If you’re earning more than that, we’ll work out your repayments at 9% of your income over that amount.

By the time you start repaying, the amounts will be different. Have a look at the table to see some examples of what you might repay based on the current threshold of £27,295 a year:

If your income changes for any reason, your repayments will change automatically. And if you haven’t finished repaying after 30 years, your loan balance will be cancelled – so your loan won’t be with you forever.

How and when do I repay?

You’ll be due to start repaying your loan the April after you finish or leave your course, but remember – you’ll only make repayments if your income is over the repayment threshold.

If you’re employed, your employer will automatically take your repayments from your salary at the same time as tax and National Insurance. If you’re self-employed, you’ll make repayments at the same time you pay your tax.

If you move abroad, you’ll still have to make repayments, but they won’t be taken automatically. You’ll repay directly to us instead – and the amount you have to repay could be different from the UK.

What about interest?

You’ll be charged interest on your loan from the day your first payment is made to you or your uni or college, until it’s been repaid in full or cancelled. It’s important to remember that the amount of interest you’re charged doesn’t change the amount you’ll repay each month.

Quick facts about repayment

• How much you repay is based on your income, not how much you borrow.
• If your income changes, either rising or falling, your repayment amounts will automatically change too.
• If your income drops below £27,295 a year or you stop working, you won’t have to repay anything until your income rises above this again.
• Any loan remaining 30 years after you’re due to start repaying will be cancelled.
• If you leave your course early you’ll still have to repay your loan, but the repayment process may be different – and you might have to pay it back earlier than usual.

To find out more about repaying your student loan, go to www.gov.uk/repaying-your-student-loan