Paying back student loans

You took the money, you spent it, and now you’re wondering how the hell you’re ever going to pay it back. If you Googled ‘when does my student loan get written off’ and it feels like you might have made a deal with the devil, don’t panic! The Mix explains why you don’t need to stress when it comes to paying back student loans.

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

Do I have to start paying back student loans as soon as I graduate?

If you’re worries about paying back student loans as soon as you leave university, you needn’t be. 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’re on Plan 1

You only pay it back when you’re earning more than £19,895 each year. If you don’t pay it back 25 years after you graduate, what’s left will get written off.

But if you started AFTER Sep 1st 2012, you’re on Plan 2

You only pay it back when you’re earning more than £27,295 each year. If you don’t pay it back 30 years after you graduate, what’s left will get written off.

If you’re from Northern Ireland or Scotland:

No matter when you started your degree, you have to be earning more than £25,000.

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. The Money Saving Expert website has a student loan calculator if your degree isn’t in maths.

How do I pay back a student loan?

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 back student loans by?

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

When does student loan get written off

• 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.

Find out more about other types of loan in this article.

Should I try to pay my student loan 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 Loans 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.