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Student loans - paying them back

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
edited March 27 in Work & Study
Ok..so I graduated this year, and I had the full student loan for 2 of my 3 years at uni.

What happens in terms of paying it back? I know you only start paying it back when you're earning a certain salary, but how much do they take each month etc and when does it start - do I need to ring the student loan company and organise it?

Thanks for any advice :)
Post edited by JustV on

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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    can't remember exactly, but if you're employed it comes off through your payroll and is automatic. If you're self employed you have to sort out paying it back yourself. The earning limit is 15k? 18k?
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    katralla wrote: »
    can't remember exactly, but if you're employed it comes off through your payroll and is automatic. If you're self employed you have to sort out paying it back yourself. The earning limit is 15k? 18k?

    £15k

    http://www.direct.gov.uk/en/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/RepayingStudentLoansCoursesStartingFrom1998/DG_10034866 might be of some use to you.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Katralla is right. In your in employment being payed by the PAYE scheme. Then once you earn over £15K a year you get deducted at 9% off anything paid over that (I did an example somewhere in Work/Study a week or two ago if you want an idea of monthly repayments). The payments are deducted monthly from your gross pay and your employer will pay and report the figures to the Inland Revenue to report to the student loans compmany. The IR will tell your employer when to start and stop making payments once it knows you are earning over the threashold.

    If your self-employed there are different rules and you need to check with the student loans company because I dont know them. I think you can set up a direct debit or standing order with the loan company to make additional repayments if you wish as well.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Under the current system, your employer tells the Inland Revenue that you were a student, and have to repay your loan. They take a small amount of your wage (when you earn £15,000 or over) each time you get paid until your debt is paid off. Also, it's worth noting that, after 25 years, any debt that you still owe is written off.

    On a personal note, were I to apply that rule, I'd be leaving university at 25, and therefore I would only be finishing paying the loan when I was 50. Depressing.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Thanks for the info guys.

    I will be earning over £15,000 so I guess it will start being paid off straight away.
    If I want to pay more off each month, or pay a chunk of it off at once (Say £500), can I do that?
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Pink Soda wrote: »
    If I want to pay more off each month, or pay a chunk of it off at once (Say £500), can I do that?
    Yep. Just tell the SLC you wanna do that, and they'd happily arrange it. You could pay the whole thing off in one go too if you got really lucky. (you got your lottery ticket yet?) :p
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    If you do nothing and your employer is above board you'll just see bits of it disapear off your pay slip before you even get your money. So it doesnt really feel like you are paying at all, just that you are taxed a bit more than most people.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Pink Soda wrote: »
    If I want to pay more off each month, or pay a chunk of it off at once (Say £500), can I do that?

    yep :yes:
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    You start paying the April following when you graduate. As has already been said it's 9% of anything you earn over 15k and just comes straight out of your wages. You can pay off lump sums whenever you want to, you just have to let them know.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    You can also make voluntary repayments early, by lump sum or standing order. If you do this as well you would obviously clear the debt a lot faster. (This is what I'm doing although I'm not at a point of having to make compulsory repayments yet).
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