Different student loans have different rules regarding how much you need to earn before you begin paying back your student loan, what interest rate you are charged, and when your loan is 'forgiven'. These rules differ depending on when you took out your student loan, and which country you were a resident of when you took out the loan (i.e. Scotland or England/Wales).
The calculator automatically figures all of this out for you, but this page summarises the rules. If you notice any mistakes here please contact me and I will update this page and the calculator. All information came from Student Loans Company website. For interest rate calculations the calculator uses the new values that came into effect in September 2019 (this article on MoneySavingExpert.com summarises the changes).
You often hear references of 'Plan 1' and 'Plan 2' loans. You will have a Plan 1 loan if you live in Scotland or took out your loan before the 2012/2013 academic year, otherwise you will have a Plan 2 loan. The interest charged and the forgiveness rules differ between Plan 1 and Plan 2 loans, but there are different forgiveness rules for Scottish and English/Welsh Plan 1 loans as well. The rules are all explained in the following sections, but rather than splitting it by Plan 1 and Plan 2 I will organise by country and start year as I find this easier to understand.
| Country | Theshold | Example for £30,000 Salary |
|---|---|---|
| Scotland | £18,935 | £995.85/Year (£82.99/Month) |
| England/Wales | Before 2012/2013: £18,935 |
£995.85/Year (£82.99/Month) |
| Since 2012/2013: £25,725 |
£384.75/Year (£32.06/Month) |
Interest rates are different for Scottish and English/Welsh students, with English/Welsh student loan interest having a sliding scale depending on how much you earn. The example interest provided is assuming no repayments have been made, even though on a £30,000 salary you would be making repayments and therefore lowering the balance you are paying interest on.
| Country | Interest Rate | Example for £30,000 Balance and £30,000 Salary |
|---|---|---|
| Scotland | 1.75% | £525 interest in a year |
| England/Wales | Before 2012/2013: 1.75% |
£525 interest in a year |
| Since 2012/2013: Earn under £25,000: 3.3% Earn £25k-£45k: 2.4% - 5.4% Earn over £45,000: 5.4% |
3.02% rate, £906 interest in a year |
Student loans are 'forgiven' after a certain period of time, meaning repayments stop and the remaining balance never has to be paid back. Try getting that deal on any other loan...
| Country | Loan Forgiven |
|---|---|
| Scotland | Before 2007/2008: When you turn 65 or 30 years after graduation, whichever comes first Since 2007/2008: 30 years after graduation |
| England/Wales | Before 2007/2008: When you turn 65 Between 2007/2008 and 2012/2013: 25 years after graduation Since 2012/2013: 30 years after graduation |