Assuming the loans are taken out post 1st September 2012 by students living in England or Wales “Plan 2” will apply:
When are loans due to be repaid?
Repayment of the loans will become due in April following completion (or prematurely leaving) the course when income exceeds the threshold of £404 per week, £1,750 per month or £21,000 per year.
What is the rate of repayment?
Repayments at the rate of 9% of gross income over these thresholds will be paid through PAYE or, if self-employed, through the self-assessment process.
Is interest charged?
Interest will be charged from the day when the first loan payment is made and compounded monthly.
The interest rates charged are currently:
- While studying – RPI + 3%
- After finishing the course – from 06/04/2017 to 05/04/2018 – RPI
- Then, according to income –
- =< £21,000 RPI
- £21-41,000 on a sliding scale up to RPI + 3% “depending on income”
- >£41,000 RPI + 3%
(RPI is taken as 1.60% during the period 1st September 2016 to 31st August 2017 after which is adjusted to 3.10%).
Failure to keep the Student Loans Company advised of current circumstances will result in interest at RPI + 3% being charged regardless of income levels.
Loans and interest may be cancelled
Amounts outstanding consisting of loan and interest remaining 30 years after you have become liable to repay, will be written off.
However, you must have made all repayments due based on income until that date otherwise the Student Loan Company may recover any amounts you still owe.