Repayment of Postgraduate Loan

The student must repay their Postgraduate Loan in line with the regulations at the time they enter repayment.

When they take out their Postgraduate Loan the repayment terms will be based on current regulations. This is expected to change when new legislation is passed by the UK Parliament. This means when the student enters repayment the terms might be different. It’s the student’s responsibility to check back and make sure they have the most up-to-date information.

The following repayment information covers both the current repayment terms and the expected repayment regulations.

When repayments will start

Students have to repay any Postgraduate Loan they borrow, including the interest charged but not until they’ve finished or left their course and their income is over the repayment threshold which is currently £21,000 per year, £1,750 a month, or £404 a week, before tax and National Insurance.

They’ll be due to start making repayments the April after they finish or leave their course.

If they leave their course early they may need to repay any overpaid amount. The amount of loan which is overpaid will be exempt from the earning threshold and will be due as soon as possible.

Once their income is over the repayment threshold, they’ll repay 9% of their income above this.

The following table shows how much they’ll repay towards their Postgraduate Loan depending on their income.

Annual income (before tax)

Monthly salary

Monthly repayment

Up to £21,000

Up to £1,750

£0

£22,000

£1,833

£7

£23,500

£1,958

£18

£25,000

£2,083

£29

£27,000

£2,250

£45

£30,000

£2,500

£67

Interest

Interest will be applied to the Postgraduate Loan balance from the day we make the first payment to the student until the loan is repaid in full or cancelled. The interest rate is based on the UK Retail Price Index (RPI) and will vary depending on the students circumstances. The interest rate is updated once a year in September, using the RPI from March of that year.

If the student already has student loans

If the student already has a student loan, how much they repay will depend on when they started their undergraduate course.

If the student started their undergraduate course on or after 1 September 2012 (Plan 2)

Students will repay 9% of their income over £21,000 towards the student loans they borrowed for their undergraduate course, and their Postgraduate Loan. This means they’ll repay 9% of their income over £21,000 in total.

Annual income (before tax)

Monthly salary

Monthly repayment

Up to £21,000

Up to £1,750

£0

£22,000

£1,833

£7

£23,500

£1,958

£18

£25,000

£2,083

£29

£27,000

£2,250

£45

£30,000

£2,500

£67

If they started their undergraduate course between 1 September 1998 and 1 September 2012 (Plan 1)

If the students income is between £17,775 and £21,000 a year they will repay 9% of their income towards the loans they borrowed for their undergraduate course.

If their income is more than £21,000 a year they will repay 9% of their income, and it will be spread across the loans they borrowed for their undergraduate course and Postgraduate Loan.

The following table below shows how repayments are applied to each loan when they’re repaying both an undergraduate loan and Postgraduate Loan.

Annual income (before tax)

Monthly repayment to your undergraduate loan

Monthly repayment to your Postgraduate Loan

Total monthly repayment

Up to £17,775

£0

£0

£0

£18,000

£1

£0

£1

£21,000

£24

£0

£24

£25,000

£24

£30

£54

£32,000

£24

£82

£106

If they started their course before 1 September 1998

Students will continue to repay or defer the loans they borrowed for their undergraduate course and they’ll repay 9% of their income over £21,000 towards their Postgraduate Loan.

They can’t defer their Postgraduate Loan - repayments will stop automatically when their income is below the repayment threshold.

What will students repay once the new legislation has been passed?

Students will repay 6%, instead of 9%, of their income over the repayment threshold towards their Postgraduate Loan. But they won’t have to make any repayments before April 2019.

If their income is below the repayment threshold, they won’t have to make any repayments.

They’re charged interest from the day the first payment is made to them until their loan is repaid in full or cancelled. The interest rate is based on the UK Retail Price Index (RPI) plus three percent.

If they’ve had any other student loans, they’ll repay these at the same time. How much they repay will depend on when they started their undergraduate course.

If the student started their undergraduate course on or after 1 September 2012 (Plan 2)

Students will repay 9% of their income over £21,000 towards the student loans they borrowed for their undergraduate course and 6% of their income over £21,000 towards their Postgraduate Loan. This means they’ll repay 15% of their income over £21,000 in total.

If the student started their undergraduate course between 1 September 1998 and 1 September 2012 (Plan 1)

Students will repay 9% of their income over the repayment threshold, which is currently £17,775, towards the student loan they borrowed for their undergraduate course and 6% of their income over £21,000 towards their Postgraduate Loan.

If the student started their course before 1 September 1998

Students will continue to repay or defer the loans they borrowed for their undergraduate course and they’ll repay 6% of their income over £21,000 towards their Postgraduate Loan.

They can’t defer their Postgraduate Loan - repayments will stop automatically when their income is below the repayment threshold.



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