To pay or not to pay? Student loans explained.

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Student loans. Most of us have one - Here is how to make sure you aren't paying too much and claim it back if you are.

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The student loan threshold is changing to from 21k to 25K as of April 2018. This means you should be paying back less starting this month. Hurray!

Can you get your money back for last year now that the threshold has changed?

Unfortunately, no.

When we called SLC to try they said the reason for the change in threshold was rising living costs to match those of this year so they were unable to backdate this across years where the thresholds were deemed fair.

Don't worry, chances are SLC still owe you money.

How could SLC owe you money?

If you started uni from 1998 onwards and were a full-time student you should only have started paying back the April after you graduated regardless of income. e.g. if you graduated April 2016 should not start paying until April 2017

You should also only start paying when you are earning above the threshold. To know your threshold you need to know what Plan you are on.

Plan 2:
If you took out your loan (excluding Postgraduate Loans) on or after 1 September 2012, and, you lived in England or Wales / received EU funding in England or Wales / lived in England and took an Advanced Learner Loan for a further education course.

The threshold was £21,000/year, rising to £25,000/year April 2018.

Plan 1:
If you took out your loan in Scotland or Northern Ireland (including Postgraduate Loans) / received EU funding, at any time in Scotland or Northern Ireland. Or before 1 September 2012 and you lived in England or Wales / received EU funding in England or Wales.

The current threshold's £17,775/yr, but it's changed every year since 2012. What counts is the threshold when you left uni – see a list of the different thresholds here.

What counts is the threshold when you left uni, not when you started and the threshold for where you lived before uni, not where you went to uni.

You also need to factor in how you get paid. These thresholds are annual, so unless you are paid annually, you make repayments when your earnings go over the weekly or monthly equivalent of the threshold. If your total earnings for the tax year didn't meet the annual threshold, you can reclaim what you repaid.

You repay 9% of what you earn pre-tax above the threshold.

For example, if you are on Plan 2 and earn 24k last year and got paid monthly that is 2k per month (24000/12). The threshold last year for most was 21k which is 1750pm (21000/12).

This is how you would work out how much you should pay back each pay slip:

9% of (2000-1750) = 9% of 250 = 9*250/100 = £22.50

As the new threshold is 25k which is 2083pm it reduces the amount you pay:

9% of (2083-2000) = 9% of 83 = 9*83/100 = £7.47

Happy days.

How do I get my money back?

If you think you started paying back your student loans too early or have been charged the wrong amount there is something you can do.

  • To reclaim, just call the SLC on 0300 100 0611 (or +44 141 243 3660 from overseas).
  • You will need your SLC customer reference number which you can find on any paperwork they have sent you. If you don't have it, call anyway as they may be able to find it for you.
  • There are no restrictions on how far back you can claim, so there's nothing to stop you doing this even if you find you overpaid years ago.

Let us know if you were able to get money back from your student loan!

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