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Its done the same as PAYE tax. If you were paid yearly you would only pay back with £15k+, but as you are paid monthly its worked out on PAYE (just like tax normally is!).
Originally posted by Lokolo
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This is STILL an issue no one talks about. And the post above is wrong.
The stated repayment threshold for student loans is
completely misleading. If you are a contract worker or self employed and your income goes up and down during the year you can earn in total way below the threshold but still make substantial payments because the yearly total is averaged per month across the year. If, as many young people do, they earn above the threshold for one month then then very little for the rest of the year they will still trigger the repayment of the loan. The student loan company assumes that if you earn, say, £2,500 for one month and then £1000 a month or less for the rest of the year you will still make full loan repayments for the year as if you earned £2000+ every month.
Given that lots of young people have precarious and intermittent income after university this really should be shouted from the roof-tops.
Martin - please make this clear in you public statements about the student loan as it makes a huge difference for some people.
Brian