The complex bit (repayments)

lecture hall

Off to uni in September and applying for Student Finance, but not sure what will happen once it comes time to repay your loan? It may seem a long way off, but it’s handy to know. We talk you through what you’ll need to pay and when.

Time to pay back

You only have to pay back your Tuition Fee and Maintenance Loans, but not other financial help like grants and bursaries. You will still have to repay your student loan even if you leave your course early, but the earliest you start repaying is when your annual income is over £21,000.

You pay back 9% of your income over the minimum amount of £21,000. Below shows what this would look like:

Student loan repayments 
Your income per year Monthly repayments
£21,000 and under £0
£25,000 £30
£30,000 £67
£50,000 £217

Interest is a set amount you pay for borrowing your Student loan. Interest starts being added to your loan from when you get your first payment at the start of your course. While you’re studying, interest is inflation (which means the rate of increase) plus 3%.

Student loan interest  
Income Interest rate
£21,000 or less Inflation
£21,000 to £41,000 Inflation plus up to 3%
Over £41,000 Inflation plus 3%

What if I can’t find a job after uni?

The idea is that you only pay when you can afford to. So you don’t make repayments if you can’t find a job, lose your job or if you’re earning less than £21,000 a year.

Some good and bad things about student loan debt:

  • It won’t make it harder to borrow more in the future – it doesn’t affect your credit rating.
  • It won’t be a hassle to pay – it comes out of your salary before you see it.
  • You won’t ever be faced with a lump sum to pay.
  • You won’t have to pay it back when you’re unemployed or not earning much.

But…

  • It will mean that your monthly repayments go up as you earn more.
  • You will have interest added to the total debt each month.
  • You will probably have to pay your loan back even if you drop out of your course.

Don’t forget to check out our article on saving money on your degree.

More information

  • The Student Room is the largest student community in the world with a range of online resources to help you get through university.
  • Go to Money Advice Service for free and impartial money advice.