If you take out a tuition fee loan and a maintenance loan they are bundled together to make one combined loan. Interest starts to accrue on the loan from the day you receive the money.
Rates of interest vary throughout the life of the loan.
While studying: The loan accrues interest at the rate of inflation (as measured by the Retail Price Index) plus 3%. This continues until the first April after graduation after which a progressive taper is applied.
Graduates earning less than £21,000: The loan accrues interest at the rate of RPI inflation.
Graduates earning between £21,000 and £41,000: The interest rate will gradually rise from RPI to RPI plus 3% the more you earn (the interest rises 0.00015% for every extra pound you earn or, put another way, if you earn £1,000 more you accrue 0.15% extra interest). These thresholds will rise with average earnings from 2017.
Graduates earning over £41,000: The loan accrues interest at the rate of RPI inflation plus 3%.
Repayments start once you are earning over £21,000 per year. You only repay 9% of everything you earn annually above £21,000.
Sample repayments*
|
Salary
|
Amount of salary from which 9% will be deducted
|
Monthly repayment
|
|
£25,000
|
£4,000
|
£30.00
|
|
£30,000
|
£9,000
|
£67.50
|
|
£35,000
|
£14,000
|
£105.00
|
|
£40,000
|
£19,000
|
£142.50
|
|
£45,000
|
£24,000
|
£180.00
|
|
£50,000
|
£29,000
|
£217.50
|
|
£55,000
|
£34,000
|
£255.00
|
|
£60,000
|
£39,000
|
£292.50
|
*Data supplied by BIS
The loan is repaid through the income tax system if you work in the UK. Student loans do not go on credit files.
The student loan is written off after 30 years.
Graduates are allowed to repay their loans early, if they wish to do so, without a penalty being applied.