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A Word on your Student Loan
Loans and debts seem to have become part of a student’s graduation present! The good news is the loans are not taxable. The bad news is one day you will eventually have to start repaying the loans you took out during your time studying.

Generally you will have to start repaying the student loan from the first April after you graduate provided you are earning and your income is more than £15,000 per annum. The income limits are viewed on a monthly or weekly basis depending on how you are paid. Therefore if you are paid monthly, you will not be expected to make any contributions until your income exceeds £1,250 per month. The weekly rate is £288.

Once you exceed these limits, then you will be required to repay 9% of your earnings above the monthly or weekly threshold


STS Your Student Loan

Billy Leaves has spent the last three years studying at Redbull University and graduates in May 2005 with student debts to the student loan company
of £10,000.
Billy finds his first job in January 2006. The pay is £24,000 per annum
(£2,000 per month).
Billy will be required to repay £67.50 per month starting from April 2006
until his income changes.
The calculation is (monthly income less threshold) x 9%
(£2,000 - £1,250) = £750 x 9% = £67.50

If you are employed, your employer will deduct the repayments from your salary. If you are self employed then other rules apply to collect the repayments.

If you receive substantial interest, i.e. over £2,000, the Student Loan Company may then adjust the percentage of 9%.

Detailed rules regarding student loans can be found on The Students Loans Company Website. The contact details can be found on our resources page »


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