Student loans

Tomlee1988

Hi

When do you have to start paying back your student loan, I borrowed up to £10,000 on my foundation degree, it was a night course but classed as full time, I curently earn just under £21,000, will I have to pay it back if I don't earn over that figure?

Please could someone help me understand the loan payback scheme?

Thanks Tom

somethingcorporate

If you havent got the skills to do a bit of basic research I would ask for my money back from the university.

Have you looked on the student loans website?

2 seconds of googling got me the right answer: http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678455&_dad=portal&_schema=PORTAL

Edited to be plan 1 after OP clarified when they did the course.

Tomlee1988

I have done research into it thanks, ask around other friends and many of them arnt 100%, so thought I'd turn to here to find out! Some people are saying £18,000 others £21,000. Didn't come to get sarcastic comments.

Ed-1

Tomlee1988 wrote: »

Hi

When do you have to start paying back your student loan, I borrowed up to £10,000 on my foundation degree, it was a night course but classed as full time, I curently earn just under £21,000, will I have to pay it back if I don't earn over that figure?

Please could someone help me understand the loan payback scheme?

Thanks Tom

Might be better posting this over on the student money saving forum.

if you started your course on or after September 2012, 9% of your annual income over £21000 will be deduced in student loan repayments (just like 20% of your income over £10000 is deducted as income tax). So student loan repayments are in practice a graduate tax. If you don't earn above the threshold you don't repay. Repayments start at the earliest in April 2016 (as the new repayment scheme was only introduced from 2012 and they needed time to set up new features such as variable interest rates etc.). Once the system is up and running you become eligible to repay from 6th April after your course finishes (as long as this is on or after 6th April 2015). You continue to be eligible to have student loan repayments taken until the sooner of: 1) your loan has been completely repaid or 2) the 30th anniversary of the date your loan became eligible to be repaid is reached (i.e. 6th April after your course finished but no earlier than 6th April 2016).

Different rules apply to those with loans from courses starting before September 2012.

Ed-1

Tomlee1988 wrote: »

I have done research into it thanks, ask around other friends and many of them arnt 100%, so thought I'd turn to here to find out! Some people are saying £18,000 others £21,000. Didn't come to get sarcastic comments.

There are different repayment thresholds for those that started their courses before 1st September 2012 and after 1st September 2012.

Those that started before are on the old repayment system (called repayment plan 1) and the repayment threshold is £16910 (£17335 from 6th April 2015) and will change by RPI (inflation) every April. This threshold does not apply to those on repayment plan 2.
You are on repayment plan 2 if you started your course on or after 1st September 2012. The threshold for this repayment system is £21000 and only starts on 6th April 2016. No repayments will be taken for those with plan 2 loans before this date.

Tomlee1988

Thanks Ed, my course finished at the end of 2011, I was told that if you didn't earn £21,000 for five years you would get it wiped away? It's quiet confusing as I've even heard Martin Lewis himself say it on TV but wasn't sure when it actually kicked in. If not I was going to start paying back this year.

Thanks Tom

somethingcorporate

Did you bother to look at the link I posted direct from the student loans website?

25 years according to plan 1 FAQs assuming you are not in Scotland.

The repayment threshold is also lower than £21k if you care to check the link.

Tomlee1988

Yes thanks it's very helpful on repayments but I was wondering if I have to pay back at all? As i heard if you haven't earned anything over £21000 for 5 years after your course has ended your student loan becomes void, gets wiped away. I am correct in saying this or do you have to pay back no matter what?

Thanks

Tom

Ed-1

Tomlee1988 wrote: »

Thanks Ed, my course finished at the end of 2011, I was told that if you didn't earn £21,000 for five years you would get it wiped away? It's quiet confusing as I've even heard Martin Lewis himself say it on TV but wasn't sure when it actually kicked in. If not I was going to start paying back this year.

Thanks Tom

Repayment plan 1 has been alive and kicking since April 2000 so your loan would've become eligible for repayment on 6th April after you finished your course. Forget £21000 as this only applies to those who started courses in September 2012 or after. The threshold for your system was £10000 from 2000-2004, £15000 from 2005-2011 and has changed by inflation every year since 2012 (and will continue to do so). It currently stands at £16910 and will increase to £17335 on 6th April this year. Repayments are 9% of your income above this threshold.

Loans taken on plan 1 since 2006 are written off on the 25th anniversary of becoming eligible for repayment.

somethingcorporate

That's totally wrong, it's not 5 years or £21k for plan 1 replayment.

Have a look a little way down this page: http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678571&_dad=portal&_schema=PORTAL

Assuming you are not in Scotland (where it is 35 years) it is written off after 25 years after it becomes payable.

Tomlee1988

Thanks for the help, I've now set up a payment plan. Glad I'm over that confusion.

Thanks