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Sale of Student Loans

The UK Government announced on 6th February that it is starting the process required to sell part of the English student loan book. It covers loans issued by any English local authority which entered repayment between 2002 and 2006. The sale is being undertaken in accordance with the Sale of Student Loans Act 2008.

The announcement made on the 6th February is available at the gov.uk website and the following information should help address any questions you have regarding your loan.

One important thing you should be aware of is that the UK Government has made it clear that there will be no impact on customers whose loans have been sold as a result of the sale.

Important information

You do not need to take any action as a result of the sale. If your loan is sold, Student Loans Company will still be responsible for administering your loan(s). This means the way you repay will stay the same and you will still receive your annual statements from us.

Although the loans will be transferred to an independent investment company:

  • The individual and overall repayments you make will not change as a result of the sale.
  • The way you repay your loan(s) will not change as a result of the sale.
  • The way the interest rate is calculated will not change as a result of the sale.
  • The terms and conditions of your loan(s) will not change as a result of the sale.

Whose loans are being sold?

The sale includes loans issued by any English local authority which entered repayment between 2002 and 2006. The sale is being undertaken in accordance with the Sale of Student Loans Act 2008. This process will take several months. If your loan is part of the sale, then, following its completion, the Student Loans Company (SLC) will write to you on behalf of the Secretary of State for the Department for Education to inform you that your loan(s) is (are) among those that have been sold. No response or action to the letter will be needed. The majority of customers with a student loan will not be included.

Why are these loans being sold?

The sale of the loans is part of a wider UK Government drive to reduce fiscal pressures and allow investment in other policies with greater economic or social returns while ensuring value for money for the taxpayer.

Student Loan Sale FAQs

Are Government allowed to do this?

The Sale of Student Loans Act 2008 permits the sale of student loans but requires that sold and unsold loans are treated in the same way.

Who will these loans be sold to?

The UK Government and the Department for Education have advised that the loans will be sold to a new independent English company whose sole purpose will be to own the loans on behalf of investors. The details of this company will be confirmed once the sale process has been completed.

How will customers be advised if their loans have been sold?

On behalf of the Secretary of State for the Department for Education, SLC will write to all customers, at their registered address, advising if their loans are included in the sale. Letters will be issued within three months of the sale concluding. If you do not receive a letter within that period, your loan is not one of those that have been sold.

What is an Income Contingent Repayment Loan?

Income Contingent Repayment (ICR) loans are the type of student loans which were made available from 1998 onwards to higher education students. These loans are repaid based on income, normally via deductions from a customer’s salary if employed or through Self Assessment tax return if self-employed.

Will the terms and conditions of these loans change?

The terms and conditions will not change as a result of the sale and SLC will continue to administer the loans.

Will the interest rate change?

No, the interest rate will not change as a result of the sale. The interest rate is currently set by the Department for Education, the Government department responsible for student loans. The interest rate is updated once a year on 1st September, using the Retail Price Index (RPI) figure from March of that year. This process will remain the same for sold and unsold loans after the sale. See Interest rates for more information.

How can I find out the balance of my account?

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

To log in you will need your Customer Reference Number, password and secret answer.

Can the loan balance be paid off immediately?

Yes. Customers can call SLC on 0300 100 0611 (Mon - Fri 8am - 8pm and Sat 9am - 4pm).

If a customer has been making repayments through their salary they need to make sure that when they call they have their:

  • last P60; and
  • all pay slips for the current financial year

Can additional amounts still be paid online towards an outstanding balance?

Yes, additional payments by credit or debit card can be made at any time by using the Make a Payment service.

Will my Employer have to take any action?

No. Employers will continue with PAYE, as instructed by HMRC.

 

Changes to Interest Rates and Thresholds 01/09/2016

The Department for Education (DfE) has announced the annual updates to the Interest Rates and Thresholds of Income Contingent Loans and Mortgage Style Loans, as set out in the relevant regulations and terms & conditions of the loans.

Income Contingent Loans

Plan 1 loans (pre-2012)

From 1 September 2016 until 31 August 2017, the maximum interest rate set for the existing Plan 1 loans will be 1.6%. However, the low interest cap will be triggered, and therefore the rate to be charged from 1 September 2016 will be 1.25%.

Please monitor this website regularly as the rates may change during the academic year.

From 6 April 2017, the repayment threshold will rise to £17,775.

Plan 2 loans (from 2012 onwards)

From 1 September 2016 until 31 August 2017, one or more interest rates may apply to you:

Your circumstances Interest rate
Whilst studying and until the April after leaving the course RPI plus 3% (4.6%)
From 6 April 2017 after leaving your course until the loan is repaid in full Variable interest, dependent upon income
RPI (1.6%), where income is £21,000 or less, rising on a sliding scale up to RPI plus 3% (4.6%), where income is £41,000 or more
If you don’t respond to our requests for information or evidence RPI plus 3% (4.6%) irrespective of income, until we have all the information we need.

The repayment threshold for Plan 2 loans has been frozen at £21,000 until at least April 2021

Postgraduate Loans

From 1 September 2016 until 31 August 2017, the interest rate for borrowers in England taking out a Postgraduate Loan for a Master’s degree will be RPI plus 3% (4.6%).

The repayment threshold for Postgraduate Loans has been frozen at £21,000 until at least April 2021.

Mortgage Style Student Loans

From 1 September 2016 until 31 August 2017, the interest rate for Mortgage Style Loans will be 1.6%.

The deferment threshold for Mortgage Style Loans will be £29,126.

If you have any questions about your Mortgage Style Loan, contact your loan administrator

 

Request for contact and employment details

We are contacting our customers by email and text message to request their current contact and employment details. We are doing this to make sure our customers receive relevant and up-to-date information from us at the right time.

If you have received an email or text message from us regarding this we require:

  • your current home address;
  • your current home telephone number;
  • your current mobile number;
  • your current email address; and
  • confirmation of whether or not you are employed.

This information will allow us to inform you of any changes we make which may affect your student loan account.

If you have received this email or text message, you can update your information by calling us on 0300 100 0603. If you are overseas please call 0044 141 626 3770. Our office opening hours are 9am to 5:30pm.

You can also email your information to: contact@slc.co.uk.

Please note this email address is for the purpose of providing the requested contact information only. Any questions raised will not be responded to via this mail box. If you have any queries regarding your account or you have documents to return then please call us on the telephone number detailed above.


 

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.



 

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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.



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