Paying Back Student Loans
Paying Back Student Loans
Paying back student loans can seem a daunting prospect, as the average student has at least £10,000 of debt by the time they graduate. However, you do not have to start paying back student loans until you are employed and earning over a certain threshold, which is currently £15,000.
How paying back student loans works:
- You pay back 9% of however much is over the £15,000 threshold, so if you earn £16,000 you will only pay back 9% of £1,000.
- Disability benefits are not counted as income.
- Declaring bankruptcy no longer wipes your student debt as it once could.
- The money will be deducted from your pay and appear on your pay slip, much like Tax which has led it to be referred to as Graduate Tax.
- If you are self-employed, then you must inform the Student Loans Company and arrange to pay it differently.
- Repayments stop automatically if your earnings fall below the threshold.
Loans are written off if:
- You reach 65 and it was taken out before September 2006.
- After 25 years if it was taken out in September 2006 or later.
- If you have a disability and are declared permanently unfit to work.
Learn more about repaying student loans
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