Repaying Student Loans 2009/10 guide discussion

Chloecat

Stinkybell wrote: »

Because they take it direct from your salary, they automatically take repayments if your monthly gross is over £1250. Even if your annual pay is well under £15000, this can happen because of stuff like overtime and bonuses. You can write to them with a copy of your P60 each April and they will pay you back direct into your bank account if your annual earnings is indeed under £15000 :cool:

Dont know if I'm doing this correctly-first time userbut here goes....
What if a person earns over £15K/annum but payments are deducted from monthly PAYE and leaves the job before the full tax year ends? In effect have paid more than 9% of anything over 15000 because paid over £1250 in the months they were working but then nothing after that for the rest of the tax year?

edclothes

as a student i think everyone all like the fashion clothes

MrsManda

Chloecat wrote: »

Dont know if I'm doing this correctly-first time userbut here goes....
What if a person earns over £15K/annum but payments are deducted from monthly PAYE and leaves the job before the full tax year ends? In effect have paid more than 9% of anything over 15000 because paid over £1250 in the months they were working but then nothing after that for the rest of the tax year?

If you've earned less than £15,000 in a tax year, you may reclaim your overpayments from the SLC if you want to. You have to request this, it is not automatic.
http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3867296&_dad=portal&_schema=PORTAL

can6342

Hi, I was wondering if you could help me with a question. I have a post-1998 student loan which I'm currently repaying through PAYE at £115/month. I'm due to finish paying it off in March 2012. SLC have written to me to ask if I want to move to direct debit payments to avoid the situation where I could end up overpaying and having to claim my money back.
My question is more around how income tax/NI is calculated for PAYE.... If I move to DD, will my take home pay increase by £115 (which I'll then pass on to SLC)? or will I see less than £115 increase in my take home pay because of tax (then I'd still have to pass on £115/month to SLC). I hope I've worded this properly, I can't seem to figure it out!

For info, I'm a basic rate taxpayer.
Thanks

MrsManda

can6342 wrote: »

My question is more around how income tax/NI is calculated for PAYE.... If I move to DD, will my take home pay increase by £115 (which I'll then pass on to SLC)? or will I see less than £115 increase in my take home pay because of tax (then I'd still have to pass on £115/month to SLC). I hope I've worded this properly, I can't seem to figure it out

Your take home will increase by £115.
Your SLC repayment is calculated before tax i.e. you pay 9% of everything you earn gross over £1250 a month.
But you are also taxed on your gross pay, otherwise people who had student loans would pay less tax than those without them.
HTH

Poolie

Student Loan deductions are calculated like Income Tax and National Insurance. They use the same Gross Income figure as Tax and NI so they are all deducted the same way.

You need to check with SLC if the DD amount will be the same as the PAYE deductions. I suspect it may be slightly more as they will take the amount you are due to repay and add on an interest amount then divide it by 12 and then adjust for the second year. You may want to check how they have calculated the amount your due to repay and they have accurate information. If they stop the repayments there will be up to 2 further months through your salary so unless SLC delay starting your repayments by 2 months then you could end up worse off by £230. They may offer this as a refund or adjust your Direct Debit.

can6342

Thank you so much Poolie and MrsManda! That makes sense.

I entered my 2010/11 monthly payments into their online calculator so I have an up to date figure of what's left to pay... I'll phone SLC to figure out how much to set the direct debit for, when it will start and when it'll stop. I also want to check that I'll be able to stop the direct debit if I'm made redundant and not earning (my department is safe at the moment, but who knows what'll happen in 6 months time).

Thanks again for your help! :beer:

Poolie

The details you put in the online calculator are not imported into the SLC system so you will need to give them the details over the phone so they can get the interest calculation correct.

Stinkybell

March 2011 RPI = 5.3% = highest interest rate since 1991 (note many of today's undergrads weren't even born in 1991!)

Hoping Mervyn King keeps interest rates low in September, feel sorry for anybody with a pre '98 loan.

slam3000

Just a quick one. Can anyone tell me what the current salary threshold is for loans taken out pre-1998? I'm not working at the moment and have deferred until April 2012 but am hoping to get a job before too long and need to know how much I can earn before SLC start asking for repayments.

Apologies in advance if this has already been asked/stated.

Thanks.