Before you graduate, Managing your money, More, Student Finance

Repaying your student loans and the ultimate top tip

Advice and Money student intern, Rosie, shares all you need to know about repaying your student loan, along with a top tip that could save you a huge sum of money…

Repaying student loans

Graduation can be a bit of a crazy whirlwind without having to worry about repaying your student loans as well. But I’m here to reassure you that it’s not as complicated as it may seem at first. It may feel overwhelming and out of reach, but once you break it down it’s a lot easier to understand. It should be low down on your list of worries after graduating. As a second year student myself, understanding the repayment process is just as useful for me as it is for you. Now, let’s do this.


The basics of student loan repayment

Once you graduate, every tuition fee loan and maintenance loan that you’ve received for the past few years will be added up into one lump sum. This is the figure that you will repay. You will enter repayment in the April after you graduate University, but you don’t have to start paying anything back until you are earning over £21,000. Sounds simple enough, right?

Ok, so let’s imagine you’re earning over £21,000. Now what? Well, any money that you earn over the £21,000 threshold will go towards repaying your student loan, 9% of it to be precise. So, if you earn £22,000 you only have to pay 9% of £1,000 every year. And if you earn £25,000 you only have to pay 9% of £4,000 every year. This is called income contingent repayment. It means that your repayments are based solely on what you earn, not what you owe; the more you earn, the more you repay. Pretty good, huh?

This table gives you an idea of what you would pay back on a monthly basis depending on what you are earning:

Income  each year before tax Monthly salary before tax Approximate monthly repayment
£21,000 £1,750 £0
£24,000 £2,000 £22
£27,000 £2,250 £45
£30,000 £2,500 £67
£33,000 £2,750 £90


Going travelling, or moving abroad?

Now, what if you graduate, find a job, work for a year and then decide to go travelling for a bit? Well, there’s no need to worry about your repayments because you only repay them if you are employed and earning over £21,000 per year. However, if you go abroad to work then you will need to keep in touch with the Student Loans Company (SLC). The threshold you have to earn before you make repayments, if you’re living abroad, may be different to the £21,000, so check this out with the SLC.


How long do I have to make repayments for?

Students also often wonder how long you have to make these repayments for. Well, everybody has thirty years, from the April after you finish your course, to pay back their student loans. If you don’t manage to pay it all off within this time then it’s written off. If you do pay it off before this, then your repayments will stop earlier! This is turning out to be way less stressful than I thought.


How much do I have to pay back?

Ok, I know what you’re thinking now. But how do I know how much I have to pay back? Well folks, thanks to our ever wiser friend, the internet, this process is made simple too. All you have to do is visit the Student Loan Repayment website and log in using your student finance customer reference number (you can find this at the top of any letters they’ve sent you through the years). Once you’ve logged on you can follow a step-by-step process to find out exactly how much you owe.

If you applied to Student Finance Wales for you funding and want to find out how to write off some of your loan before you graduate, make sure to read on to my ultimate top tip at the end! Take your chance while you still can!


How do I pay it back?

I bet you’re thinking this process couldn’t be made any simpler. But guess what – it is! Your student loan repayments are taken out of your gross salary at the same time as national insurance and tax, so you won’t even have to remember to pay them every month. It can be better to think of it as more of a graduate tax then a loan repayment. Although, if you become self-employed then you will need to make payment arrangements.

The last thing you need to know is that there is, as with every loan, an interest rate. The rate can vary from year to year but it’s based on RPI, plus up to 3%. You can get a more in-depth explanation of this though from the Student Loans Company.


The ultimate top tip for those who applied to Student Finance Wales

Are you a student who applied to Student Finance Wales for funding? Did you take out a maintenance loan in your first year of study?

Well you may be in luck! If you’re eligible, the Welsh Government will write off up to £1,500 from your overall loan repayments once you make your first repayment to them. Sounds too good to be true, I know. Don’t believe me? See for yourself about the Welsh Cancellation Scheme on the Student Loan Repayment website here!

You could have up to £1500 written off of your maintenance loan debt by paying just £5 – whether you have just come to the end of your first year, or you are about to graduate.

You might wonder why it would be worth making a voluntary payment of £5 right now, especially when you know that your balance is written off thirty years from the April after you finish your course. Well, by making a voluntary payment now and having money written off, you can reduce the interest that would be accruing on your total loans.

No need to thank me, it’s what we do here at the Advice and Money. If you have any further questions, don’t hesitate to get in contact with the Advice and Money Team.


Now does repaying your student loan sit lower on your worry list?

There, we made it. And look how simple it was! I, for one, am no longer so worried about paying back my student loan. It’s easy and simple (and non-evasive upon your plan to go travelling after graduation!). If you have any other questions don’t hesitate to get in contact with the Advice and Money Team.


Contact Advice and Money

For more information or advice, don’t hesitate to get in contact with us at the Advice and Money team in the Student Support Centre on 50 Park Place. We’ll be happy to talk to you and guide you through anything that may be troubling you.

Tel: 029 2087 4528



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Online support all year round

Get work experience before you graduate with GO Wales

Tips on finding a job after graduation from Cardiff Award Alumni


Your feedback and help please

Have you found this blog post useful?  Please help us by commenting in the comments bar below, and  if there is anything further you’d like to know ask your questions there too.

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Best wishes,

Rosie, Advice and Money Student Intern.


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The Student Support Centre has a range of services dedicated to helping students make the most of their time at University, including: Advice and MoneyCareers and EmployabilityCounselling, Health and Wellbeing, Disability and Dyslexia and International Student Support. The Student Support Centres are located at 50 Park Place, Cathays Campus and Cardigan House, Heath Park Campus.

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