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|User Info||Student Loan 'Forgiveness'?; entered at 2022-05-01 17:23:42|
Registered: 2019-05-07 Atlanta
UK has an interesting way to repay student loans which are all provided by government not private companies. It is government policy to encourage college for pretty much everyone but that stupidity is pretty common. There is major drama now as the interest rate is based off RPI and not interest rates so everyone is going to get hit with close to 12% interest rate this next year when Bank of England interest rate is only 0.75%.|
The important thing to remember is that the amount youll repay will be based on how much you earn, not how much you borrow.
Once you leave your course, youll only repay when your income is above the repayment threshold. The current UK threshold is 27,295 a year, 2,274 a month, or 524 a week.
If your income changes, the amount you repay will change too. But don't worry this happens automatically. If you stop working, or start to earn below the repayment threshold, your repayments will stop until you earn over the threshold.
Any outstanding loan balance will be cancelled 30 years after youre due to start repaying even if you haven't repaid any of it. How you'll repay depends on what you choose to do after your course:
If you start work, your employer will automatically take 9% of your income above the threshold from your salary, along with tax and National Insurance.
If you're self-employed, youll make repayments at the same time as you pay tax through self-assessment.
Interest is charged from the day the Student Loans Company makes your first payment to you or your uni or college, until your loan is repaid in full or cancelled.
The interest rate is based on the Retail Price Index or RPI, which measures changes to the cost of living in the UK. The interest rate is normally updated once a year in September, using the RPI from March of that year.
It's important to remember that the amount of interest you're charged doesn't affect the amount you'll repay each month.