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PGL - How repayments are calculated

 

You’ll only make repayments if your income (before tax and other deductions) is above the repayment threshold of:

  • £404 per week; or
  • £1,750 per month before tax.

You’ll repay 6% of your income over this threshold (the weekly and monthly thresholds are the equivalent of £21,000 per year).

If you have a Postgraduate Loan for a Master’s and Doctoral course then you’ll make a combined repayment of 6% which will cover both Postgraduate Loans.

How to work out your monthly repayment amount

Monthly example

If your monthly income is £2,000, this is over the repayment threshold of £1,750. Your repayment would be calculated as:

  1. £2,000 - £1,750 = £250
  2. 6% of £250 = £15

So your repayment for that month would be £15.

Weekly example

If your weekly income is £600, this is over the repayment threshold of £404. Your repayment would be calculated as:

  1. £600 - £404 = £196
  2. 6% of £196 = £11 (round down)

So your repayment for that month would be £11.

What if your pay changes

Repayments will be taken if you go over the weekly or monthly threshold at any point in the year, for example if you work overtime or get a bonus.

If your income changes, either rising or falling, your repayment amounts will change to reflect this.

If you stop working, your repayments will stop until you start working again and your income is over the repayment threshold.

End of tax year refunds if you earn less than £21,000

If at the end of the tax year you’ve earned less than the annual repayment threshold of £21,000 and you’ve made repayments, then you can ask for these repayments to be refunded.

What if you have an undergraduate loan

If you’ve already got an undergraduate loan you’ll continue making repayments to these as well as your Postgraduate Loan. Your payslip may show a separate deduction for each. The thresholds are different if you took out your loan before 1 September 2012 (Plan 1) or after 1 September 2012 (Plan 2).

So the total you’ll repay including your Postgraduate Loan depends on when you took out your first undergraduate loan:

If you’ve studied more than one undergraduate course (and taken loans for each) with one starting before 1 September 2012 and one after this date, you’ll have a Plan 1 and a Plan 2 loan.

Repayments if you have an undergraduate loan before 1 September 2012 (Plan 1)

You’ll repay your Postgraduate Loan in addition to any Plan 1 repayments you make

This means you’ll repay:

  • 6% of your income above £21,000 to your Postgraduate Loan; and
  • 9% of your income above £18,330 to your Plan 1 loan (this figure is for illustrative purposes only, as this repayment threshold applies to the 18/19 tax year).

This table is an example of your repayments to each loan based on different incomes:

INCOME (before tax) REPAYMENT
Annual Monthly Plan 1 loan Postgraduate Loan Total monthly repayment
£18,330 £1,527 £0 £0 £0
£21,000 £1,750 £20 £0 £20
£25,000 £2,083 £50 £19 £69
£30,000 £2,500 £87 £45 £132

If you also have a student loan taken out for a different course starting from 1 September 2012 you’ll also have a Plan 2 loan . There’s an example of how repayments are allocated to your Plan 1, Plan 2 and Postgraduate Loan in these circumstances.

Any student loans taken out before September 1998, should continue to be repaid to your debt owner unless you’ve deferred these repayments.

Repayments if you have an undergraduate loan from 1 September 2012 (Plan 2)

You’ll repay your Postgraduate Loan in addition to your undergraduate Plan 2 repayments you make.

This means you’ll repay:

  • 6% of your income above £21,000 to your Postgraduate Loan; and
  • 9% of your income above £25,000 to your Plan 2 loan.

This table is an example of your repayments to each loan based on different incomes:

INCOME (before tax) REPAYMENT
Annual Monthly Plan 2 loan Postgraduate Loan Total monthly repayment
£21,000 £1,750 £0 £0 £0
£23,000 £1,916 £0 £9 £9
£25,000 £2,083 £0 £19 £19
£27,000 £2,250 £15 £30 £45
£30,000 £2,500 £37 £45 £82

If you also have a student loan taken out for a different course starting before 1 September 2012, you’ll also have a Plan 1 loan. There’s an example of how repayments are allocated to your Plan 1, Plan 2 and Postgraduate Loan in these circumstances.

Repayments if you have undergraduate loans for different courses starting before and after 1 September 2012 (Plan 1 and Plan 2)

You’ll repay your Postgraduate Loan in addition to your undergraduate Plan 1 and Plan 2 loan repayments

This means you’ll repay:

  • 6% of your earnings above £21,000 to your Postgraduate Loan; and
  • 9% of your earnings above £18,330 to your undergraduate loans (this figure is for illustrative purposes only, as this repayment threshold applies to the 18/19 tax year)

This is the total repayment you’ll make to your loans.

How your repayments are distributed between your loans

The way your undergraduate repayments are applied to your Plan 1 and Plan 2 loans depends on your income. If this is:

  • between £18,330 and £25,000 your repayment will be applied to your Plan 1 loan
  • more than £25,000 it will be applied to your Plan 1 and Plan 2 loan

This table is an example of the way repayments are distributed between all your different loans based on your income:

INCOME (before tax) REPAYMENT
Annual Monthly Plan 1 loan Plan 2 loan Postgraduate Loan Total monthly repayment
£18,330 £1,527 £0 £0 £0 £0
£19,000 £1,583 £5 £0 £0 £5
£23,000 £1,916 £35 £0 £9 £44
£25,000 £2,083 £50 £0 £19 £69
£27,000 £2,250 £50 £15 £30 £95
£30,000 £2,500 £50 £37 £45 £132
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