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Student Loan Repayments

 

If you took out a Loan to fund your Tuition, this will need to be paid back. If you left your course early or before graduating you will also still have to pay back the Tuition fee loans and the maintenance loans. 

 

There are two types of repayment plan for Income Contingent Loans; the one that applies to you depends on when you started your course and where you live

Plan 1

Who is it for?

This is for English and Welsh Students who started before 1 September 2012 and all Scotish and Northern Irish Students

What will you pay?

 You will start to repay your loan from the April following the date you graduate or leave your course and will pay 9% of anything you earn over £17,775 before tax per year. There is also an interest charge of 1.25%

 

Plan 2

Who is it for?

This is for English and Welsh students who started after 1 September 2012 and earn over £21,000

What will you pay?

You pay 9% of anything you earn over the threshold of £21,000 per year. Interest on plan 2 is inflation plus 3% if you earn over 21000. if you earn  £21000 it is inflation only

 

If you have both plans, you will still pay back 9% of income over £17775. If you earn over £21,000 9% of your income will go towards both your plans

(know your Student Loans Plan)

Repaying through:

  • PAYE:Your employer will calculate and deduct student loan repayments from your pay. These deductions will be shown on your pay slip. On SimpleTax you can enter the deducted amount in the Expenses group of your Employment page.

  • Self-Assessment:You will normally make student loan repayments in the tax year that begins after you graduate or leave your course , along with your Tax and NICs. SimpleTax will automatically take into consideration your student loans simply by you activating the following option in the ALMOST THERE page.
  • You will also have to indicate the plan you are on

 

 

 

 

How is it calculated?

According to HMRC's csl1 leaflet:

"You start by including all of the relevant income included in your annual return. This will include all self-employed profits, any employment income and any unearned income providing the unearned income is more than £2,000. If the sum of all your relevant income exceeds the annual threshold (£17,775 plan 1, £21000 plan 2), Student Loan repayments of 9% will be deducted on anything over the threshold and will be included in your Self Assessment tax bill."

 

After each payment, the Students Loans Company will send you a yearly Statement with your outstanding balance.

SLC and HMRC can only monitor your outstanding balance on an annual basis, rather than monthly, so it is possible you could repay more than is outstanding on your loan.You will be entitled to a refund if you overpay your loan and just need to contact HMRC or the Students Loans Company.

 

 

information from:http://www.studentloanrepayment.co.uk/

 

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