If you began studying in 2012 or after, major changes will directly affect the way you pay back your student loan.
There has been a lot of talk of changes to student finance and tuition fees in general. Last October the government announced changes that will come into action from 6th April.
What are the changes?
- For students from England and Wales who started uni in 2012 (plan one loans) the payment threshold for repaying student loans will rise from £21,000 to £25,000.
- Once earning £25,000 or over you will pay back 9% of your loan per year.
- The repayment threshold will change annually depending on average earnings.
What about those who began studying before 2012?
- The threshold will also change for those who began studying between 1998 and 2012, and students from Scotland or Northern Ireland (plan two loans).
- It will rise to £18,330 from £17,775. You will also pay back 9% of your loan per year.
What about those who have plan one and plan two loans?
- Essentially 9% of everything you earn above £25,000 will go towards your plan two loan. Whilst everything you earn between £18,330 and £25,000 will go towards your plan one loan.
Straightforward enough right? In a nutshell, we don’t have to pay back until we’re earning more than we were previously.
The government are currently reviewing tuition fees after admitting the current system was failing. Surprising absolutely no one.