MSE News: Close to paying off your student loan? You can now choose your direct...

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MSE_Luke
MSE_Luke Posts: 295 MSE Staff
First Anniversary
edited 11 August 2021 at 2:06PM in Student MoneySaving
Graduates in the final years of repaying their student debt can now choose the day their monthly loan repayment is paid...
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'Close to paying off your student loan? You can now choose your direct debit dates'
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  • anesh002
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    i got my letter the other day asking to switch to direct debit.

    Surely paying this back on a DD means its come out after tax, which means I lose money in the long run? If its paid back via in the normal way (i.e straight out of paycheck) then I wont lose the income tax. or can the tax be claimed back. I'd rather over pay it then claim the money back than switch to DD and pay 40% tax on the extra money i would have in my take home!

    this seems like a lazy SLC and HRMC trying to get rid of admin at the cost of the student again!
  • jimclark1967
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    anesh002 wrote: »
    Surely paying this back on a DD means its come out after tax, which means I lose money in the long run? If its paid back via in the normal way (i.e straight out of paycheck) then I wont lose the income tax. or can the tax be claimed back. I'd rather over pay it then claim the money back than switch to DD and pay 40% tax on the extra money i would have in my take home!

    Student loan repayments are calculated based on gross salary, but paid from net. There are no "tax advantages" to paying via PAYE compared to DD.
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