You only become liable to repay your Tuition Fee and Living Cost Loans once you have graduated and are earning over £21,000 a year. Repayments will start in the April after you graduate (providing you are earning over the threshold amount). If you have taken both Loans out these will be combined and you will make one repayment.

The Student Loans Company will advise HM Revenue and Customs (formerly the Inland Revenue) when your Loan is liable for repayment. They will then instruct your employer to deduct repayments from your gross income at a rate of 9% of any income earned in excess of £21,000 a year.

An example:

  • A student finishes their degree in July 2016
  • Their salary is £25,000, so they earn £4,000 in excess of £21,000
  • Their repayments are calculated at £30 per month (9% of £4,000/12)
  • From April 2017 £30 per month is deducted from their wages via PAYE

The below table shows salaries and typical repayments.

Salary Amount of salary from which 9% will be deducted Monthly repayment
£25,000 £4,000 £30
£30,000 £9,000 £67.50
£35,000 £14,000 £105
£40,000 £19,000 £142.50
£45,000 £24,000 £180
£50,000 £29,000 £217.50
£55,000 £34,000 £255
£60,000 £39,000 £292.50

Interest rates

Interest on your loan will be applied at inflation (RPI - Retail Price Index) plus 3% whilst you are studying, and up until the April after you leave university. From the April after you graduate, if you are earning below £21,000, interest will be added at the rate of inflation.

For graduates earning between £21,000 a year and £41,000 a year, interest will be applied between RPI and RPI plus 3% on a gradual scale depending on income.

For graduates earning above £41,000 a year, interest will be applied at RPI plus 3%.

What happens if I lose my job?

If your salary falls below £21,000 a year your repayments will automatically stop. If you take a career break, go on maternity leave or are unemployed your repayments will be suspended until you are earning over the £21,000 threshold. However, interest on the Loan will continue to be applied even if your repayments are suspended.

How long will it take to repay the Loan?

This depends on the size of your Loan to begin with and how much you earn. However, if you have not paid off the Loan after 30 years (starting from the April after you graduate) the balance will be written off. For more information on Loan repayments please visit the Student Loan Company page on Repayment.

Will I be charged if I repay the Loan early?

Following consultation, the Government has announced there will be no charge on graduates repaying their loans early.

If you have any questions please email student.finance@uea.ac.uk.