How does student loan repayment work in the United Kingdom?

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This article provides comprehensive information about student loan repayment in the UK. Learn about payroll deductions, repayment plans, understand how repayments are made, how stops to student loans work, what happens if you change jobs, and more.

In this article, we cover:

How does payroll deduction work for student loan repayment in the UK?

In the UK, college students who request government loans to fund their college education can have repayments deducted from their salary. It's essential to declare any student loans during the job onboarding process. The HMRC will verify these details and automatically send any updates to the payroll system.

What role does Remote play in collecting student loan repayments in the UK?

Remote may collect student loan repayments on behalf of HMRC directly from employee’s salary at the same time as tax and National Insurance. Repayments will be shown on the payslip. Repayments are based on pre-tax income, but the money is taken after tax has been paid.

How does Remote calculate repayments of my student loans?

Employees should let employer know which repayment plan applies to them, so employer can deduct the right amount. HMRC will provide guidance to employers, including the repayment thresholds for each plan type.

Employers calculate repayments each pay period, not yearly. So if an employee's income changes month to month, they might pay back more some months than others.


I finished paying my loan but it's still being deducted.  Can Remote help me put a stop to my student loan repayments?

Please note that Remote can only stop student loan payments after receiving instructions from HMRC. We are unable to stop these payments until we get instructions from HMRC. If you finished paying your student loan and it's still being deducted from your salary, please contact HMRC directly for further assistance.

How much will I have to pay towards my student loan?

The amount that employees repay depends on their income, not on the amount they borrowed.

If employee income falls below the repayment threshold, the repayments will stop and only restart when the income is above the threshold again. The threshold amounts change on April 6 every year.

How are student loan repayment plans assigned to UK students?

In the UK, student loan repayment plans are assigned based on the start date of the course, not by individual choice. If a student has multiple loans, they could have different repayment plans simultaneously.

There are different types of repayment plans, as outlined on the UK government website:

  • Repayment plan 1 - If employee started the course before September 1, 2012 Employee will start making repayments if the income is over the repayment threshold, which is currently £20,195 a year.
  • Repayment plan 2 - If employee started the course between September 1, 2012 and July 31, 2023 Employee will start making repayments if the income is over the repayment threshold, which is currently £27,295 a year.
  • Repayment plan 5 - If employee will start an undergraduate or postgraduate course after August 1, 2023. The repayment threshold for the 2026-27 tax year will be £25,000 a year.
  • Postgraduate Loan - If employee started a postgraduate Master’s course on or after August 1, 2016 or a Doctoral course on or after August 1, 2018. Employee will start making repayments if the income is over the repayment threshold, which is currently £21,000 a year.
  • Plan 4 for students that started an undergraduate or postgraduate course in Scotland on or after September 1, 1998.

When do students start repaying their student loan in the UK?

The Student Loan is paid directly to the students at the start of each study term. Employees will become liable for each installment once it’s paid.

Students will become liable for future installments at the start of the second and third terms of the course and they will remain liable for this amount even if they withdraw, transfer or suspend studies at a later date.

Where can I see the information about the repayments of my student loans?

Employees need to set a repayment account where they can see all the details regarding the ongoing payments.

What happens to my student loan when I change jobs in the UK?

When employees change jobs, the previous employer should provide a P45 with a 'Y' in the student loan box. The new employer will then begin to deduct student loan payments from the employee's salary.

What happens if I don’t have a P45 form?

If employees don't have a P45, the employer may ask them to complete a starter checklist, which includes a check box to indicate that there is a student loan.

I think I'm on the wrong student loan repayment plan, what do I do?

  • If employees think they are on the wrong plan, they should check on what plan they are on by signing into their online repayment account and downloading their ‘active plan type letter’.
  • Then, verify the information the employer has.
  • If there is a mistake, the employer can update payroll details and employees can request a refund to the Student Loans Company (SLC) if the plan has been overpaid.
  • It’s advisable to hold onto your payslips and P60 form for when you need to request a refund with the Student Loans Company (SLC).

For more information about student loans, see Student loans guide to terms and conditions 2023 to 2024.

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