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Student Loan :: Having graduated it is time to think about how you are going to pay back the hundreds, if not thousands of pounds worth of debt you have accumulated through student loans. But don't worry you may not have to start paying it back straight away. Here follows a summary of the system for replacement laid out by the government. Summary for the Repayment of Student Loans The Teaching and Higher Education Act 1998 introduced income contingent student loans to replace the former type of loan, usually referred to as 'mortgage style' loans. The regulations governing the repayment of income contingent loans have now been drafted and are the subject of this consultation. The repayment regulations will come into force on 1st November 1999 although no repayment of the loans will be required before 6th April 2000. The Student Loans Company will be responsible for administering borrowers' accounts. A borrower will be required to begin repayment of their loan once their income exceeds a threshold figure of £10,000 (gross) per annum. Borrowers will not have to make repayments until the April following their graduation or leaving their courses. The amount to be repaid will be calculated as a percentage of income over the threshold level. This percentage rate is presently set at 9%. Taxable unearned income above the value of £2,000 per annum will be included in the calculation of the total income of a borrower. Borrowers who are self employed will make repayments to the Inland Revenue through their self assessment tax returns. Borrowers who have unearned income of more than £2,000 per annum may also be required to make repayments through self assessment. For most borrowers, the collection of repayments will be made by employers who will make deductions from salaries and pass the sums collected to the Inland Revenue. For more details see the government website.
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