Income Contingent Repayment means that the amount you repay will be based on your income. If you earn less than the repayment threshold, currently set at £15,000 a year, you will not be required to repay anything. If you earn above the threshold, you will be required to repay 9% of the amount you earn in excess of the threshold.
Your loan will become due for repayment in the April following the date that you complete or leave your course. The Student Loans Company will contact HM Revenue and Customs in advance of that date to advise them that your loan will be entering repayment. HM Revenue and Customs will then contact your employer to advise when they should commence taking student loan deductions from your salary.
As an Income Contingent Loan Repayer, you will fall into one of three categories:
- PAYE (Pay as You Earn): you are employed and will be making Student Loan repayments through your salary. HM Revenue and Customs will instruct your employer to deduct repayments from your gross income if you earn above £15,000 a year. Your employer then has up until 22nd May after the end of the tax year to confirm these deductions to HM Revenue and Customs.
- Self -Assessment: you are self-employed and will be responsible for calculating and making your own repayments.
- Overseas: you work, or are planning to work, abroad and are out with the UK tax system. You will make repayments directly to the Student Loans Company. You will need to provide evidence of your income in order to determine a repayment schedule for you. It is important that you contact the Student Loans Company before you leave the UK, with as much advance notice as possible. More information can be found in the Overseas Repayment section.
