You will not have to start repaying your loan until the April after you graduate or stop attending your course. For example if you graduated in May 2008, your repayments will be due from April 2009.
The amount you repay will be linked to your gross income. HM Revenue and Customs will advise your employer that repayments should be deducted from your income at the rate of 9% of any income in excess of £15,000 per year. If you are due to start paying back your Student Loans from April 2012, you’ll have the option of taking a repayment break of up to five years.
Repayment deductions from your salary will be shown on your pay slips. The Student Loans Company does not receive your repayment details until after the end of each tax year. It is, therefore, important that you monitor your own repayments, keeping track of your balance so you know when you are due to finish repaying. You can login to your account and check your balance or use the balance calculator if you have your payslips or P60 to hand.
If you are self employed, you will need to complete a self-assessment form and return it with any payment by 31 January following the relevant tax year. HMRC will do the calculations for you if you send in your tax return before 30 September.
It is possible that you had a student loan deduction in a pay period where your earnings exceeded the monthly or weekly threshold, but over the whole year your income did not exceed £15,000. This might happen if you receive a bonus payment or work overtime.
In this situation you will be able to apply to the Student Loans Company for a refund of the repayments you have made in that year; however, the Student Loans Company will not make a refund unless you ask for one.
You may decide you do not want a refund – allowing you to pay off your loan more quickly.
If you repay via PAYE, you will also be entitled to a refund if you overpay your loan. The Student Loans Company will not be able to authorise any refunds until HM Revenue and Customs confirm your total earnings and Student Loan repayments at the end of the tax year or you send the Student Loans Company your payslips showing your Student Loan deductions for the current tax year.
