Do I need to tell HMRC/my employer that I'm taking out a student loan while working?

pinkteapot

I work full-time PAYE, salary £21k. I'm studying part-time with the Open University in my spare time. My fees for the coming year will be paid by student loan from Student Finance England (I self-funded the first few years but that's another story). 

I'm unclear on whether I need to tell HMRC or my employer that I now have a student loan? I earn below the repayment threshold anyway. Even if I didn't, I'm not clear on whether repayments would start immediately or not until I graduate.

I had a student loan once before, many years ago, when I did my first degree. But that was simpler as I just went to uni full-time then started work! (that loan was repaid years ago)

I have to do tax returns so I'll be back in the spring thoroughly confused about how I should now be answering the question about whether I have a student loan, given that I'll be a current student not a graduate.

tasticz

Student finance is due from the next April after the course ends. E.g. if your course finished on August 2021 then your repayment starts in April 2022.

keyword: after the course ends

In March of the year your payment starts, you should inform your HR that you need to start paying student finance and what plan you’re on for bachelors degree and postgraduate loan for masters. You should inform them regardless of your salary threshold. Deduction will be made accordingly.

It is good idea to let your employer know of your study so that they can accommodate your requests.

pinkteapot

Thanks.

Oh, yes - everyone at work knows I'm studying (subject is related to the job). Just haven't got into how I'm paying for it before as it's not been relevant. 

Lagrange

According to HMRC's website  

"You’ll only repay your student loan when your income is over the threshold amount for your repayment plan. The threshold amounts change on 6 April every year.

The earliest you’ll start repaying is either:

• the April after you leave your course
• the April 4 years after the course started, if you’re studying part-time"

Please note as stated on the Open University website "All OU students are considered part-time students. That means, even if you choose to study at full-time equivalent intensity, you’ll be a part-time student"

This suggests that you will start repaying the April four years after the course started if your income exceeds the threshold amount. If you exceed the threshold amount the student loan repayments will be deducted from your PAYE income but you will still need to enter the details on your self assessment return if you receive one to complete.  

greatkingrat

tasticz said:

In March of the year your payment starts, you should inform your HR that you need to start paying student finance and what plan you’re on for bachelors degree and postgraduate loan for masters. You should inform them regardless of your salary threshold. Deduction will be made accordingly.

There is no need or obligation to tell your companies HR department to start making deductions. HMRC will notify them directly.

MalMonroe

There's a lot of info on different government websites - but if you have received funding before and successfully graduated, it seems that you aren't eligible for a loan for another undergraduate degree.

https://www.gov.uk/student-finance/who-qualifies

It's not clear whether you're doing another U/G course or a postgrad one but I assume undergrad. I only did the one undergraduate course and that was pretty straightforward.

If your degree relates to your job, though, would your employer consider paying towards your degree? Many employers do. 

There is a lot of information in this link here - https://www.gov.uk/government/publications/student-loans-a-guide-to-terms-and-conditions-for-2020-to-2021/student-loans-a-guide-to-terms-and-conditions-2020-to-2021

And you should have received some information from the SLC as well about all the terms and conditions of your loan. I certainly did when I did my degree.

Student Loans Company tells HMRC about all student loans so you don't need to let them know. 

tasticz

greatkingrat said:

tasticz said:

In March of the year your payment starts, you should inform your HR that you need to start paying student finance and what plan you’re on for bachelors degree and postgraduate loan for masters. You should inform them regardless of your salary threshold. Deduction will be made accordingly.

There is no need or obligation to tell your companies HR department to start making deductions. HMRC will notify them directly.

Just sharing my experience as I went 2 months without any deductions for plan 2 loan SLC repayment. When I did masters I informed HR in March and everything went fine. No harm in dropping an email.