Skip to content Accesskeys Newsroom

How student loan repayments are worked out (courses starting from 1998)

If you started your course in or after 1998, the amount you repay on your student loan will be based on how much you earn.

When do I start repaying?

You will not start repaying your student loan until the April after you have finished or left your course. The amount you repay will be 9 per cent of anything you earn over the repayment threshold, which is currently £15,795. You will not start paying back your loan until you earn over the repayment threshold.

Pay as you earn (PAYE)

Most people pay back their student loans in the same way as they pay their income tax. If you are employed in the UK, your student loan repayments will be collected through the PAYE system. Your employer will be advised by HM Revenue & Customs (HMRC) to calculate and deduct student loan repayments from your pay.

The current gross annual income threshold is £15,795. This means that you will only begin making repayments when your gross earnings are more than:

  • £1,316 per month
  • £303 per week

If you are paid at different intervals – for example, fortnightly or every four weeks – these figures are adjusted in line with the annual threshold.

HMRC will then advise the Student Loans Company (SLC) annually how much you have repaid and the SLC will update your account.

You can get further information on repaying your student loans through PAYE by visiting the link below:

PAYE – An example of how it works in practice

Jane is an employee and pays her Income Tax on her wages through PAYE. She earns £1,500 per month, which is £184 over the repayment threshold of £1,316 per month.

Jane’s repayments will be 9 per cent of £184; therefore Jane’s employer will deduct £16 per month from her wages. If Jane’s wage either increases or decreases, this will be reflected in the amount of deductions (if any) that are made.

Self Assessment

If you are self-employed or have unearned income above £2,000 you will need to complete a self-assessment with HRMC by 31 January following the relevant tax year. HRMC will then notify you how much you are liable to repay toward your student loan.

The current gross annual income threshold is £15,795. The SLC will update your account annually when HMRC advise them how much you have repaid.

You can get further information on repaying your student loans through Self-assessment by visiting the link below:

Self Assessment – An example of how it works in practice

Matthew is self-employed and therefore will need to complete his self assessment for the 2011/12 financial year by 31 January 2013. HMRC will assess his income and advise him how much he is liable to repay.

For this example, Mathew’s annual income is £18,200, which is £2,405 over the repayment threshold of £15,795. He will have to repay 9 per cent of £2,405, therefore HMRC will advise him he needs to repay £216.

He will pay this directly to HMRC who will forward the repayments to SLC on his behalf.

Paying your loans through both the PAYE and SA systems

There may be occasions when you need to repay your loans through both the PAYE and the Self-assessment system, such as if you are a UK employee and also have unearned income, for example from investments.

If you need advice about repaying your student loan contact the SLC by telephone or find further information on payment options by checking out the Student Loan Repayment website.

Working Overseas

If you are working overseas or planning to work overseas, you will need to notify the SLC. In the majority of cases you will need to complete an Overseas Assessment with SLC, however if you are in any doubt you can contact the SLC and they can give you advice on how to arrange your loan repayments.

The Overseas team can be contacted on the following telephone numbers:

  • 0845 073 8891
  • +44 141 243 3660 (if you are currently overseas)

You can also get further information on repaying your student loan by checking the following page:

As with UK residents, you will not start repaying your student loan until the April after you have finished or left your course. The amount you repay will be linked to your income and you will not start paying back your loan until you reach the repayment threshold.

Your student loan repayments will be 9 per cent of anything you earn over the threshold. However because of the differences in living costs, your repayment threshold when living abroad may not be the same as it is in the UK. Check to find the repayment threshold in your country of residence.

More useful links