Graduate Blog

Everything you need to know about… Paying Back Your Student Loans

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It’s probable that you won’t have even considered paying back what was once thought of as lovely chunks of free money at the beginning of every term. Now, obviously you were aware it WASN’T free, but the idea that it would one day need paying back – with interest – seemed like a very distant thought.

We all know that student loans only need paying back once you’ve reached a specific level of salary, but it’s always good to be prepared and understand the ‘ins and outs’ of repaying such a massive debt (painful to hear, I know). The reason this debt SHOULDN’T be viewed as a ridiculous weight on your shoulders are as follows:

Repayment Boundaries – Probably the most obvious upside to student loans and the biggest ‘pro’ factor when deciding to take out student loans is that the finance company only start taking repayments when you reach a certain level of salary as detailed below (the difference is to do with the rise in tuition fees, if you were wondering):

  • Students starting university prior to September 2012: £15,795.
  • Students starting university after September 2012: £21,000.

Automatic Payments – There’s no setting up of annoying standing orders and direct debits. The Student Loans Company have set up the process so that repayments are taken directly from your income – you might even forget all about them as you won’t even see it! If you are earning above the level you need to be at to pay back your loans, it will be taken as of the April following your employment. If your salary falls below this line, repayments are halted. If you’re an eager beaver, you can also choose to pay off extra on your loan!

Progressive Payments – The amount of repayment of student loans per month is completely dependent on your salary. Essentially the more money you earn, the more money you pay back per month! This is not fixed, as the amounts often change to reflect inflation, but here are the roundabout figures of how much you would repay per month including interest:

For students beginning AFTER September 2012

Earning less than £21,000: No repayments per month
Earning £25,000: Repay £30 per month
Earning £30,000: Repay £67.50 per month
Earning £40,000: Repay £142.50 per month
Earning £50,000: Repay £217.50 per month
Earning £60,000: Repay £292.50 per month
Earning £50,000: Repay £256.50 per month
Earning £60,000: Repay £331.50 per month

For students beginning BEFORE September 2012

Earning less than £15,795: No repayments per month
Earning £16,000: Repay £1.50 per month
Earning £21,000: Repay £39 per month
Earning £25,000:  Repay £69 per month  
Earning £30,000: Repay £106.50 per month
Earning £40,000: Repay £181.50 per month
Earning £50,000:   Repay £256.50 per month
Earning £60,000:  Repay £331.50 per month


Big Loans don’t mean Big Payments
 – The finance company has organised the loan repayment process so that the size of the loan doesn’t dictate how much you pay back per month. Rather, a bigger loan would mean that you would be paying it back for longer. This means that prospective students aren’t deterred if they need more financial assistance than others, or if they want to undertake longer courses.

Repayments AREN’T tax – It’s easy to get yourself into the mind-set that once you begin paying back a student loan, you will owe it back forever. It is NOT a tax, therefore once the amount plus interest is paid, you will stop making repayments. Simple.

There, that wasn’t so scary… was it?

About the Author

Jade A Jade A

I am currently working as a marketing intern for Grads.co.uk and I have recently graduated from the University of York with a degree in English Language and Linguistics. However, my real passion at university was writing, and particularly writing for blogs. I began a blog myself over a year ago, switching between fashion and beauty, to my university experiences and I have been hooked ever since. Blog writing opened me up to the world of social media and blogging communities that I quickly became a part of, and since then I have been fascinated by the use of blogging and social media for marketing and PR. Working as a marketing intern at Grads.co.uk is giving me the opportunity to experience marketing and PR first-hand and I enjoy every opportunity I get. It’s really opening my eyes to the prospect of a career in marketing and PR and I hope to continue gaining valuable experience in this area and hopefully a future permanent post in the industry will follow!

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