What You Need Know About Repaying Student Loans
Your student loan repayment questions, answered.
Find getting your head around student loan repayments overwhelming? You’re not alone.
When you’re about to embark on an exciting new journey after university, there’s nothing like £45,000 worth of debt to bring you back down to Earth. But while glancing at your student loan statement is enough to give you sleepless nights, don’t panic. What really matters is how much you’ll pay each month. But with so much information out there, where do you even start?
That’s where we’re here to help. We’re answering some of the most common questions about repaying your student loan. From when it’ll get written off, to repayment thresholds and what happens if you move abroad, we’ve got you covered.
In this article:
- How much student loan do I owe?
- When will I start paying back my student loan?
- How does the interest rate affect my repayments?
- When will my student loan get written off?
- What happens to my student loan if I move abroad?
- What about student loan repayment if I’m self-employed?
- What happens to my student loan if I drop out of university?
- Can I get a refund if I paid too much student loan?
- Should I pay it back early?
How can I find out my student loan balance?
First things first, addressing the giant money-shaped elephant in the room should be top of your list. Knowing how much you owe might make you dry-heave but it’s a good idea to know what you’re working with.
To find out your balance, you can log into your student finance account with either your email or customer reference number. You’ll find this on any letters you have from the Student Loans Company (SLC).
Your maintenance loan hits your account at the start of every term, so you will be able to see the exact schedule of payments and total balance in your online account.
When will I start paying back my student loan?
Everyone can breathe a collective sigh of relief, as you won’t have to start paying off your student loan the minute you leave campus.
Each student loan plan has a limit of how much you need to earn before you start repayments. The earliest you’ll start paying back your student loan is the April AFTER you graduate. Whichever plan you’re on, you’ll always pay back 9% of anything you earn over the threshold.
For example, if you were on plan 1, and you earned £28,000 per year (before tax) you would work out:
£28,000 – £24,990 = £3,010
9% of £3,010 = £270.90 to pay back per year.
Monthly repayment = £22.58.
| Student loan plan | Repayment threshold |
|---|---|
| Plan 1 | £24,990/year (£2,082/month or £480/week) |
| Plan 2 | £27,295/year (£2,274/month or £524/week) |
| Plan 4 | £31,395/year (£2,616/month or £603/week) |
| Plan 5 | £25,000/year (£2,083/month or £480/week) |
Not sure which plan you’re on? You can find out more in our guide to the different student loan plans that take a closer look into payment thresholds and interest rates.
How does the interest rate affect my repayments?
Bad news is that you’ll gain interest on your student loan from the first payment you receive from the SLC. Good news is it won’t affect how much you actually pay back monthly, as the repayment rate will always be 9%, even when the interest rate changes.
When will my student loan get written off?
If you’re looking at your student loan statement and wondering how the hell you’ll ever pay it off, don’t worry. Only 27% of graduates who started in 2022/23 are predicted to pay off their student loan completely. The number has recently jumped to 61% with the 2023/24 starters, but that still leaves just under half of students who won’t pay their whole loan back.
But even if you’ve not managed to pay a penny back, your loan will be completely wiped after a certain number of years, depending on which plan you’re on.
| When you started university | When your loan is wiped |
|---|---|
| 1990-1997 (over 40s) | When you reach 60 |
| 1998-2005 (England, Wales and NI) | When you reach 65 |
| 1998-2006 (Scotland) | Either 30 years from April after you leave university, or when you reach 65 (whichever comes first) |
| 2006-2011 (England, Wales and NI) | 25 years after the April you leave university |
| 2007+ (Scotland) | 30 years after the April you leave university |
| 2012-2022 (England) | 30 years after the April you leave university |
| 2012+ (Northern Ireland) | 25 years after the April you leave university |
| 2012+ (Wales) | 30 years after the April you leave university |
| 2023+ (England) | 40 years after the April your first repayment was due (April 2026 or first April after you leave university – whichever later) |
What happens to my student loan if I move abroad?
We’ve all heard before that your student loan payments will stop if you move abroad. But this isn’t true. You have to let the SLC know if you’re leaving the country for more than three months to work. They’ll be able to let you know what your new monthly payments will look like, as every country has a different threshold.
Not telling the SLC that you’ve left the country could be an expensive move. Without the info they need, they’ll charge you a fixed monthly amount which is often a lot more than the usual 9% repayment.
The repayment thresholds and fixed monthly amounts can vary wildly depending on the country and which payment plan you’re on. So it’s worth contacting the SLC as soon as you know you’ll be out of the country for more than three months to get your payments sorted.
Here are some examples of plan 2 overseas repayment thresholds and fixed monthly amounts:
| Country | Repayment threshold | Fixed monthly amount |
|---|---|---|
| Australia | £32,755.00 | £446.40 |
| Canada | £32,755.00 | £446.40 |
| Indonesia | £10,920 | £148.80 |
| Ireland | £27,295.00 | £372.00 |
| Italy | £21,840.00 | £297.60 |
| USA | £32,755.00 | £446.40 |
| United Arab Emirates | £21,840.00 | £297.60 |
What about if I’m self-employed?
If you’re self-employed, you still need to make student loan repayments once you earn over the threshold. HMRC will let you know how much you owe when you file your tax return at the end of the year.
Saving some money back means you’ll be ready to go when you file your tax return.
What happens to my student loan if I drop out of university?
Even if you decide university isn’t the right fit for you, you’ll still need to think about how you repay your student loan. As your student loan drops every term, you’ll need to repay the full amount even if you leave halfway through the course.
Give the SLC a ring if you’re leaving your course so they can stop any future payments.
Your maintenance loan works slightly differently. If you’ve left a course midway through the term, any loan that covers the remaining days of term will be counted as an overpayment. This’ll need to be paid back straight away. The SLC can help arrange repayment, or a payment plan if you can’t pay it back in full.
The rest of your student and maintenance loan will be taken monthly once you earn over the threshold for your plan.
Can I get a refund if I paid too much student loan?
Sometimes you can end up paying back too much of your loan at once. This can happen if you change jobs or hours, start paying back before the April after you graduate, or go on maternity leave. We’re all feeling the pinch, so every penny can count.
The good news is that you can get a refund if you’ve overpaid. The best way to do this is to ring up the student finance helpline. They’ll be able to check your payments since you graduated and will be able to refund any overpayments.
But while the extra chunk of change might help ease your money woes, it’s not technically a refund. Any overpayment that is paid back to you will just be re-added to your balance. So if the interest rate goes up, it’ll take you longer to pay back your whole loan.
Our article on what the SLC is and how it works explains what you’ll see on your statement and when you can ask for a refund.
Should I pay back my student loan early?
With most loans, you’ll usually be encouraged to pay it back as early as possible, to avoid expensive interest hikes. But student loans act a little differently. They don’t affect your credit score, they need you to earn a certain amount to pay them off (and payments stop if you go below the threshold), and the interest you pay is set to the rate of inflation.
So while you would think overpaying is the right thing to do, it’s not always the case. In fact, you might find that the extra cash used to overpay your loan could have better uses. Especially if you end up with other debts that would benefit from early repayment.
As ever, it’s worth remembering that your loan will be wiped after a certain amount of time, so even if you don’t end up paying it back, it won’t be around forever.
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