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