Repaying student loans

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Repaying your student loansRepayments depend on how much you earn, not how much you borrow

If you're a full-time student, you become eligible to start making student loan repayments the April following graduation (this is the start of the new tax year after you’ve left university and is when your 30-year repayment term begins) but you'll only actually start to make repayments once you are earning over the earnings threshold - currently £21,000 a year. Part-time students studying for more than three years will become eligible to start repayments in the April after they have finished their first three years but again will only actually do so once they are earning over the income threshold.

If you don't finish your course, you'll still have to repay your loan.

If you've taken out student loans for fees and for maintenance you'll repay them together as one combined loan under the same terms.  The amount of your monthly repayments will be determined by how much you earn after you graduate and not by the amount you have borrowed. At the time of writing, this will be 9% of earnings over £21,000 a year so whatever the amount of your loan, repayments would be for example:

Annual earnings
Monthly repayment
£21,000 nil
£21,500 £3.75
£23,000 £15.00
£25,000 £30.00
£30,000 £67.50

The earnings threshold is expected to increase each year in line with wage inflation. If, once you've started making repayments, you take a career break or your salary falls below the earnings threshold, your repayments will be suspended until you're earning over the threshold amount again. If you haven't paid the loan off after 30 years (starting the April following graduation, regardless of whether you are actually making loan repayments), the balance of your loan will be written off.

The most common repayment method is where deductions are taken directly from your wages through the tax system. There are separate arrangements for self-employed graduates and those working abroad.

Interest rates

While you're studying, and up until the April after you leave university, interest at the rate of inflation (measured using RPI) plus 3% will be added to your loan.

From the April after you leave university if you're earning below £21,000, interest at just the rate of inflation will be added.

Graduates earning between £21,000 and £41,000 will be charged interest on a sliding scale up to a maximum of inflation plus 3%.

Graduates earning above £41,000 will be charged interest at the full rate of inflation plus 3%.

See what your repayments could be
Go to the MoneySavingExpert.com webpages on student finance for those starting after 2012.
Download guidance from the government about student finance – note that at the time of writing (1 November 2013) the information is for those starting in 2013.

study@leeds.ac.uk 0113 343 2336