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Postgraduate Loan - How repayments are calculated

 

You’ll only start repaying if your income is above the repayment threshold of £21,000 per year. This means you need to be earning over:

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

The amount you’ll repay is 6% of your earnings over this threshold.

How to work out your monthly repayment amount

  1. Take away £21,000 from your annual salary before tax
  2. Work out 6% of the remainder
  3. Divide that figure by 12
  4. Round down to the nearest pound

For example, if you were earning £30,000 per year:

  1. 30,000 – 21,000 = 9,000
  2. 6% of 9,000 = 540
  3. 540 / 12 = 45
  4. Round down

So your monthly repayment to your Postgraduate Loan would be £45.

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. The earning threshold before you begin repaying your undergraduate loan is 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 earnings above £21,000 to your Postgraduate Loan; and
  • 9% of your earnings above £17,775 to your Plan 1 loan (this figure is for illustrative purposes only, as this repayment threshold applies to the 17/18 tax year).

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

INCOME REPAYMENT
Annual (before tax) Monthly Plan 1 loan Postgraduate Loan Total monthly repayment
£17,775 £1,481 £0 £0 £0
£21,000 £1,750 £24 £0 £24
£25,000 £2,083 £54 £20 £74
£30,000 £2,500 £91 £45 £136

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 any Plan 2 repayments you make.

This means you’ll repay:

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

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

INCOME REPAYMENT
Annual (before tax) Monthly Plan 2 loan Postgraduate Loan Total monthly repayment
£21,000 £1,750 £0 £0 £0
£25,000 £2,083 £30 £20 £50
£30,000 £2,500 £67 £45 £112
£35,000 £2,916 £105 £70 £175

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 £17,775 to your undergraduate loans (this figure is for illustrative purposes only, as this repayment threshold applies to the 17/18 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 £17,775 and £21,000 your repayment will be applied to your Plan 1 loan
  • more than £21,000 it will be applied to your Plan 2 loan

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

INCOME REPAYMENT
Annual (before tax) Monthly Plan 1 loan Plan 2 loan Postgraduate Loan Total monthly repayment
£17,775 £1,481 £0 £0 £0 £0
£19,000 £1,583 £9 £0 £0 £9
£21,000 £1,750 £24 £0 £0 £24
£25,000 £2,083 £24 £30 £20 £74
£32,000 £2,500 £24 £82 £55 £161

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