# Student loan plan repayments | Payfit Help Center

The quantity an worker repays depends upon which student loan plan they’re on.

Each plan has a compensation threshold for weekly or month-to-month earnings:

• 9% of the quantity earned over the brink for Plan 1 and a couple of
• 6% of the quantity earned over the brink for the Postgraduate Loan

If an worker has a Plan 1 or 2 loan and a Postgraduate Loan, they’re going to repay 15% of the quantity earned over the brink.

The worker doesn’t repay something if their earnings is underneath the brink.

Interest begins being added to the loan from when an worker will get their first fee.

### Plan 1 Threshold

The thresholds are £364 per week or £1,577 a month (earlier than tax and different deductions). They change on 6 April yearly.

You’re on Plan 1 in case you are:

• an English or Welsh student who began your undergraduate course earlier than 1 September 2012
• a Scottish or Northern Irish student

### Example Calculations for Student Loan Plan 1

This month your earnings was £2,000, which is over the Plan 1 month-to-month threshold of £1,577.
Your earnings was £423 over the brink (£2,000 minus £1,577).
You pays again £38 (9% of £423) this month.
2. Your annual earnings is £27,000 and you’re paid a daily month-to-month fee of £2,250 (£27,000 divided by 12).
This is over the Plan 1 month-to-month threshold of £1,577.
Your earnings is £673 over the brink (£2,250 minus £1,577).
You pays again £60 (9% of £673) every month.

### Interest on Plan 1

The rate of interest on Plan 1 is at present set to 1.75%. You can discover rates of interest for earlier years.

### Plan 2 Threshold

The thresholds are £494 per week or £2,143 a month (earlier than tax and different deductions). They change on 6 April yearly.

You’re on Plan 2 in case you are:

• an English student who began your undergraduate course on or after 1 September 2012.
• a Welsh student who began your undergraduate course on or after 1 September 2012.

### Example Calculations for Student Loan Plan 2

This week your earnings was £600, which is over the Plan 2 weekly threshold of £494.
Your earnings was £106 over the brink (£600 minus £494).
You pays again £9 (9% of £106) this week.
2. Your annual earnings is £28,800 and you’re paid a daily month-to-month fee of £2400 (£28800 divided by 12).
This is over the Plan 2 month-to-month threshold of £2,143.
Your earnings is £257 over the brink (£2,400 minus £2,143).
You pays again £23 (9% of £257) every month.
READ:   Do you may have student loans? Here’s how you may benefit from the brand new stimulus invoice

### Interest on Plan 2

The rate of interest on Plan 2 is 6.3% whereas finding out.

This is made up of the Retail Price Index (RPI) plus 3%. RPI is at present set at 3.3%.

Once a person has left the course, the rate of interest depends upon earnings within the present tax 12 months.

If somebody is self-employed, the earnings is the overall earnings quantity on their Self-Assessment kind.

If somebody is an worker, the earnings is their taxable pay:

• plus any pension contributions
• minus any advantages acquired out of your employer which can be taxed by means of payroll (ask your employer should you’re undecided)

If somebody has multiple job in a 12 months, the rate of interest can be primarily based in your mixed earnings from all of your jobs.

Annual earnings Interest fee
£25,725 or much less RPI (at present 3.3%)
£25,725 to £46,305 RPI (at present 3.3%), plus as much as 3%
Over £46,305 RPI (at present 3.3%), plus 3%

The Student Loans Company has extra data on how they calculate curiosity.

The thresholds are £404 per week or £1,750 a month (earlier than tax and different deductions).

You’re on a Postgraduate Loan compensation plan in case you are:

• an English or Welsh student who took out a Postgraduate Master’s Loan or Postgraduate Doctoral Loan.

If you’re a Scottish or Northern Irish student who took out a Postgraduate Tuition Fee Loan or Postgraduate Living Cost Loan (Scotland solely), you’ll repay these underneath Plan 1.

### Example Calculations for Postgraduate Loan

This week your earnings was £600, which is over the Postgraduate Loan weekly threshold of £404.
Your earnings was £196 over the brink (£600 minus £404).
You pays again £11 (6% of £196) this week.
2. Your annual earnings is £28,800 and you’re paid a daily month-to-month fee of £2,400 (£28,800 divided by 12).
This is over the Postgraduate Loan month-to-month threshold of £1,750.
Your earnings is £650 over the brink (£2,400 minus £1,750).
You pays again £39 (6% of £650) every month.
READ:   What Is College Tuition Insurance, and Do You Need It?

The rate of interest on Postgraduate Loans is at present 6.3% .

The rate of interest is made up of the Retail Price Index (RPI), plus 3%. RPI is at present set at 3.3%.

The rate of interest is up to date in September yearly utilizing the RPI from March of that 12 months.

## Claiming a refund if an staff earnings adjustments in the course of the 12 months

An worker can apply for a refund should you make repayments however your whole annual earnings (from 6 April to five April the next 12 months) is lower than:

• £18,935 a 12 months for Plan 1
• £25,725 a 12 months for Plan 2

## Combination plans

### If an worker has each Plan 1 and Plan 2 loans

An worker pays again 9% of their earnings over the Plan 1 threshold (£364 per week or £1,577 a month).

If their earnings is underneath the Plan 2 threshold (£494 per week or £2,143 a month), the funds solely go in the direction of the Plan 1 loan.

If their earnings is over the Plan 2 threshold, their funds go in the direction of each the loans.

### If an worker has a Postgraduate Loan and a Plan 1 or Plan 2 loan

An worker pays again 6% their earnings over the Postgraduate Loan threshold (£404 per week or £1,750 a month). In addition, they’re going to pay again 9% of their earnings over the Plan 1 or Plan 2 threshold.

### Example Calculations for Postgraduate plus Plan 1 or 2

1. You have a Postgraduate Loan and a Plan 2 loan.
Your annual earnings is £28,800 and you’re paid a daily month-to-month fee of £2,400 (£28,800 divided by 12).
This is over the Postgraduate Loan month-to-month threshold of £1,750 and the Plan 2 threshold of £2,143.
Your earnings is £650 over the Postgraduate Loan threshold (£2,400 minus £1,750) and £257 over the Plan 2 threshold (£2,400 minus £2,143).
You pays again £39 (6% of £650) to your Postgraduate Loan and £23 (9% of £257) to your Plan 2 loan so your whole month-to-month compensation can be £62.
2. You have a Postgraduate Loan and a Plan 1 loan.
Your annual earnings is £28,800 and you’re paid a daily month-to-month fee of £2,400 (£28,800 divided by 12).
This is over the Postgraduate Loan month-to-month threshold of £1,750 and the Plan 1 threshold of £1,577.
Your earnings is £650 over the Postgraduate Loan threshold (£2,400 minus £1,750) and £823 over the Plan 1 threshold (£2,400 minus £1,577).
You pays again £39 (6% of £650) to your Postgraduate Loan and £74 (9% of £823) to your Plan 1 loan so your whole month-to-month compensation can be £113.

The Student Loans Company has extra data on how they allocate repayments when you have a Plan 1, Plan 2 and Postgraduate Loan.

## Repaying student loans with a number of jobs

Employers will deduct repayments from an staff wage, supplied the worker earns over the minimal threshold.

HMRC might ship the worker a tax return to make a self evaluation of the repayments owed for the entire 12 months.

If an worker has a Plan 1 or Plan 2 loan, they’re going to must repay 9% of all earnings over the brink.

If an worker has a Postgraduate Loan, they’re going to must repay 6% of all earnings over the brink.

If an worker has already made repayments from their wage, they are going to be deducted from the compensation quantity.

Employees are suggested to maintain all payslips and P60 as they’re going to be wanted if claiming a refund.

Employees would possibly find yourself paying their loan again sooner if their earnings from financial savings and investments is over £2,000 a 12 months.