Paying back your student loan

You took the money, you spent it, and now you’re wondering how the hell you’re ever going to pay it back. The Mix explains why you don’t need to stress over your student loan.

guy graduating looking serious

It can be hard to enjoy graduation with that debt on your head.

Do I have to start paying my loan back as soon as I graduate?

Not necessarily. You have to be earning over a certain amount before you start paying it back. So your student loan doesn’t need to be part of your post-uni ‘I don’t know what to do with my life’ panic.

How much you need to be earning depends on what your uni fees were. If you don’t remember the hoo-hah, they shot up from roughly £3000 a year to £9000 in 2012. So…

…if you started your degree BEFORE Sep 1st 2012

You have to be earning more than £17,775 before you pay anything back if you’re from England or Wales.

But if you started AFTER Sep 1st 2012

You have to be earning more than £21,000 if you’re from England or Wales.

If you’re from Northern Ireland or Scotland

No matter when you started your degree, you have to be earning more than £17,775.

These thresholds change every year. For up-to-date information, check out the student loan repayment website. If you’re in Scotland check SAAS for more information.

If I’m earning over those amounts, how much do I have to pay back?

Nine per cent of everything you earn over the threshold. So if your graduate job starts at £22k (Ooo, get you!), you’ll only be paying back nine per cent of £1,000, not the full £22k.

How do I pay it back?

Your student loan repayments are usually taken out of your salary automatically; you’ll see how much is being deducted from your pay slip.

If you’re self-employed or a freelancer, you can find out more about how to pay it back on the student loan repayment website.

When do I have to pay it back by?

There’s no deadline! In fact, eventually it could just be written off depending again on when you started your degree. So…

…if you started uni BEFORE September 1st 2012

Your debt is written off 25 years after you graduate if you’re from England or Wales.

But if you started AFTER September 1st 2012

It’s written off 30 years after you graduate if you’re from England or Wales.

If you’re from Northern Ireland

It’s written off 25 years after graduation

And if you’re from Scotland

It’s wiped after 35 years (no complaining, you didn’t have to pay anything for tuition).

Is my student loan building interest?

Yes, annoyingly. Just like any other loan, your student loan has been building interest ever since you took it out – hence the heart-attack-inducing number on the bottom of the statements they insist on sending you. But actually, this is a quite low rate of interest compared to lots of other loans you could take out.

Should I try to pay it off ASAP?

It’s really up to you – depending on how much you can afford to pay off, and how you feel about debt personally.

If you want to get rid of it quicker, you can make a direct payment of £5 or more to the Student Loan Company at any time – even if you’re not earning over the paying-back threshold yet.

However, don’t panic if you don’t have the spare funds to do that, as student debt is actually one of the ‘best’ debts you can have. Paying it off shouldn’t be a priority if you have other debts like credit card bills.

If you need further support on this, give us a call on 0808 808 4994. We’re unable to give specific money advice but can guide you to the best places for expert support.

Next Steps

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Updated on 29-Sep-2015