Calling all students & graduates…
Students that have recently graduated and even students that are preparing to start University need to be aware of how their student loan deductions are worked out and how much they will pay back when they start working. Quite often students worry about how much they will need to pay back when they are in paid work.
There are two types of repayment plans. I have summarised below how both plans work and included how to make calculations so that you are able to check your student loan deductions.
Is for English and Welsh Students who have started the course before 1st September 2012 and for all Scottish and Northern Irish Students.
If you are on plan 1 you will start repaying your Student loan when you earn over £17775 each year, this amount changes each year.
This means anything you earn over £1481.25 each month you have 9% deducted.
For Example if you were on £20000 a year:
£1666.67 – £1481.25 = £185.42 x 9% = £16.00
Is for English and Welsh students who started after 1st September 2012.
On Plan 2 you will start repaying your Student loan when you earn over £21000 each year.
This means anything you earn over £1750 each month you will have 9% deducted.
For Example if you were on £26000 a year:
£2166.67 – £1750 = £416.67 x 9% = £37.00
The current repayment threshold for 2017-18 for Plan 1 is £17,775 however from 6 April 2018 the repayment threshold for pre-2012 loans will rise to £18,330 for Plan 1.
There will be no changes for plan 2 loans at £21,000 and the postgraduate loans also remains at £21,000
For more information please visit Gov.uk