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Changes to Interest Rates and Thresholds

BIS today (11th August) announced changes to the Interest Rates and Thresholds of Income Contingent Student Loans and Mortgage Style Student Loans.

Income Contingent Student Loans for pre 2012 loans

From 1 September 2014, until further notice, the interest rate set for the existing Income Contingent Repayment Loans will be 1.5%.

From 1 September 2014 until 31 August 2015, the interest rate for the Plan 1 Income Contingent Repayment Loans will be the lower of the Retail Prices Index in March 2014, or 1% above the highest base rate of a nominated group of banks. As the RPI for March 2014 was 2.5%, the maximum rate of interest you will be charged between 1 September 2014 and 31 August 2015 is 2.5%. However, due to the low interest rate cap, the rate from 1 September 2014 will be 1.5% until further notice, but that rate may vary if the bank base rate is increased or decreased.

Income Contingent Student Loans for post 2012 loans

The basic RPI rate for post-2012 loans will be 2.5%. So RPI+ 3% will be 5.5%.

Mortgage Style Student Loans

The interest rates and deferment threshold for Mortgage Style Loans, from 1 September 2014 to 31 August 2015:

  • the interest rate for mortgage-style loans will be 2.5%;
  • the deferment threshold for mortgage-style loans will be £26,727.

Those with mortgage style student loans queries should contact their loan administrator.


 

Transfer of sold Mortgage Style Loans to Erudio Student Loans Ltd.

In November 2013 Government completed the sale of the outstanding student loans owned by around a quarter of a million borrowers. The sale related to the remaining loans taken out by students who began courses between 1990 and 1998. These loans were sold to Erudio Student Loans Ltd and management of these loans will be transferred to them on the 1 March 2014.
From Monday 17 February onwards, letters will be issued to inform customers that their Mortgage Style Loans have been sold to Erudio Student Loans Ltd.
Here are some Frequently asked questions to help answer any queries you may have:

What is a Mortgage Style Loan?
Mortgage Style Loans were available to higher education (HE) students who started course between August 1990 and August 1998. Repayments of these loans were collected directly by Student Loans Company (SLC). The loans are repayable over a fixed number of instalments, irrespective of the amount outstanding.

Why has SLC transferred ownership of my loan account(s)?
The UK Government decided to sell these loans to help reduce the current Public Sector Net Debt (PSND). This is part of a wider UK Government programme and is done in the best interest of taxpayers.

For further information about this go to www.bis.gov.uk

Who are Erudio Student Loans Ltd?
Erudio Student Loans Ltd was established in 2013 to purchase a portfolio of student loans from the UK Government.

Erudio Student Loans Ltd is regulated by the same governing bodies as SLC.

For queries on any of your loans that have been transferred, contact Erudio Student Loans Ltd directly on 0845 217 1134 or visit their website at www.erudiostudentloans.co.uk

Are any of the Terms and Conditions of my loan(s) affected by this transfer?
No, the same Terms and Conditions will continue to be applied.

Will there be any change to how the interest rate is calculated?
No, there will be no change to how the interest rate is calculated annually or how it is applied to your loan(s). This will continue to be set each year by the UK Government. The current interest rate, from 1 September 2013 to 31 August 2014, is 3.3%.

What do I do if I want to repay my loan account(s) in full?
You can repay your transferred loan account(s) in full at any time. There will be no changes to repayment terms you agreed when you took out the loan(s). For information about a settlement figure contact Erudio Student Loans Ltd on 0845 217 1134.

What if I currently defer my loan? Will that continue?
Yes, your existing deferment will remain in place until the end of the deferment period. Erudio Student Loans Ltd will then contact you regarding reapplying for deferment.

What do I do if I want to defer any of the loans that have been sold?
You can still apply to defer your Mortgage Style Loan(s) that have been sold. For information on deferment and how to apply you should contact Erudio Student Loans Ltd directly.

I have other loan(s) administered by Honours Student Loans/Thesis Servicing - are they affected?
No. Any existing loan arrangements you have with Honours Student Loans/Thesis Servicing are not affected. You should contact them directly for any information about your loan accounts.

Can I still access my loan account(s) information through my online account at www.studentloanrepayment.co.uk?
After the transfer date you'll only be able to view your Income Contingent Repayment (ICR) Loans from the online account you have with us.

What if I currently make repayments by Direct Debit, do I need to do anything?
No, you don't need to do anything - your loan account(s), Direct Debit instruction and monthly repayment amount(s) will transfer over automatically. 

What if I currently make repayments by Standing Order, cheque, Postal Order or continuous card repayment do I need to do anything?
Yes, you will have to contact Erudio Student Loans Ltd to set up new arrangements with them.

I currently have other loans that I repay through my salary/wages - will this change?
No, any loan(s) you repay through your employer/HM Revenue & Customs (HMRC) are called Income Contingent Repayment (ICR) Loans – you'll continue to repay them in this way.

 

Sale of Mortgage Style Student Loan Book Completed

The Government has completed the sale of the outstanding student loans owned by around a quarter of a million borrowers. The sale relates to the remaining loans taken out by students who began courses between 1990 and 1998.

The loans have been sold to Erudio Student Loans and will be transferred in the next few months.

Customers need to take no action at this time and you will be contacted by letter in a few months to advise when the administration of your loan accounts has been taken over by Erudio Student Loans. Until you receive this correspondence you should continue to contact Student Loans Company (SLC).

Here are some frequently asked questions to help answer any queries you may have:

Who do I contact about my Mortgage Style Loan?

You will continue to contact Student Loans Company (SLC) until you receive correspondence to advise that the administration of your loan has been transferred to the new owner.

Has my loan been sold?

If you have a mortgage style loan, taken out between 1990 and 1998 and this is still managed by SLC then yes, it has now been sold. You should continue to contact SLC should you have any queries until you are advised otherwise.

Will I be contacted if my loan is sold?

Yes, you will be contacted by Erudio Student Loans and SLC, who will inform you by letter that your loan has been sold. You will be contacted early in the New Year.

How can I find out what the current status of my account is?

You can log into your account at www.studentloanrepayment.co.uk using the Customer Reference Number (CRN) you used when applying for student finance.

Will the terms and conditions of my loan change?

No. Your loan balance will not change as a result of the sale.

Will I have to increase my repayments?

No, if you are currently repaying your loan your repayment plan will remain the same.

I currently have arrears on my loan account(s) – do I need to do anything?

You should continue to repay your student loan either through SLC or the Debt Collection Agency you have an arrangement with. If you have any queries regarding your agreement you should contact SLC or Debt Collection Agency dealing with you loan account directly.

How can I find out the balance of my account?

Log in to your account at www.studentloanrepayment.co.uk

What does this mean…protected against what? Will my loan still be protected? What about the interest?

Borrowers will remain protected and there will be no change to their terms and conditions, including the calculation of interest rates for loans.

What if I currently defer my loan? Will that continue?

Yes, your existing deferment will remain in place until the end of the deferment period. Erudio Student Loans will then contact you regarding reapplying for deferment.

Will the interest rate change?

No, the interest rate will not change as a result of the sale. The interest rate for Mortgage Style Loans is set by the Department for Business, Innovation and Skills (BIS) from 1st September each year and is set with reference to the previous March Retail Price Index (RPI) figure. This process will continue after the sale. From 1st September 2013 to 31 August 2014 it will be 3.3%.



Interest Rate Announcement

 

Interest Rate Announcement - 08/08/2013

Student loan interest rates change each academic year, i.e. from 1 September. These changes are published on the SLC corporate and repayment websites.

Plan 1 (pre-2012) Income Contingent Repayment Loans

From 1 September 2013, until further notice, the interest rate set for the Plan 1 Income Contingent Repayment Loans will be 1.5%.

From 1 September 2013 until 31 August 2014, the interest rate for the Plan 1 Income Contingent Repayment Loans will be the lower of the Retail Prices Index in March 2013, or 1% above the highest base rate of a nominated group of banks. As the RPI for March 2013 was 3.3%, the maximum rate of interest you will be charged between 1 September 2013 and 31 August 2014 is 3.3%. However, due to the low interest rate cap, the rate from 1 September 2013 will 1.5% until further notice, but that rate may vary if the bank base rate is increased or decreased.

Plan 2 (post-2012) Income Contingent Repayment Loans (For customers in England and Wales)

From 1 September 2013 until 31 August 2014, one or more interest rates may apply to you:


Your circumstances Interest rate<
Whilst studying and until the April after leaving your course RPI plus 3% (6.3% for 2013-14)
If you finish or leave your course before April 2016* RPI plus 3% (6.3% for 2013-14) until the April after you leave your course, then RPI only until April 2016

* The earliest date for repayment for all post-2012 (Plan 2) borrowers will be April 2016


Mortgage-Style Loans (loans taken out before 1998)

From 1 September 2013 to 31 August 2014, the interest rate for Mortgage Style loans will be 3.3%.

From 1 September 2013, the deferment threshold for mortgage style loans will be £28,775. If you have a gross income of £28,775 per year (equivalent to £2,398 per month) or less, you may be eligible to apply for deferment.

Need more information?



 

Repayment Threshold Change

Income Contingent Repayment Loans


From April 2014 the UK Repayment Threshold for Plan 1 Loans will change from £16,365 to £16,910



 
 

Cookies on the Student Loan Repayment site

This website uses cookies to help make it more useful for you and to help us understand how our customers use the site. For more information about what cookies this website uses and what they are for, visit our security information page.



 

Your Security is Important to us

At Student Loans Company, we take your security very seriously and are committed to protecting you whenever you use our services. To help us do this you should always have your Customer Reference Number and Secret Answer available before speaking to one of our advisors. If you don't have your Customer Reference Number and Secret Answer you will be asked some additional security questions before we can access your account and help with your enquiry.



 

Completing your repayment term - advice to customers on repayment options

If you are within two years of repaying your loan in full you can now choose to make your remaining monthly repayments by Direct Debit rather than through PAYE.


Student loan repayments are usually collected through the tax system with the Student Loans Company only able to monitor your balance on an annual basis, rather than monthly. This means that it is possible you could repay more than is outstanding on your loan.


If you choose to set up a monthly Direct Debit to pay your remaining balance then we can calculate exactly when you are due to repay, making sure you only pay exactly what you owe.


For more information about repaying by Direct Debit, see completing your repayment term.



 

Filling in a P46 form

When you start a new job you might be asked to complete a P46 form. Box D on this form asks if you have a student loan to repay.


You should only enter X in Box D if:

  • You have an ‘Income Contingent’ Loan and
  • You have graduated or left your course for good and
  • You have an outstanding balance on your ‘Income Contingent’ Loan

Do not enter X in Box D if:

  • You only have a Fixed Repayment Loan or
  • You have not graduated or left your course - this also applies to sandwich course students who only come into repayment in the April after their course has finally finished.

If you enter X in Box D, student loan repayments will be taken from your salary.


If student loan repayments are currently being taken from your salary and you believe this may be incorrect, please call us on 0845 0738 891 (open Mon-Fri from 8.00am to 8.00pm).



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