Student Loans are part of the government’s financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying, and it is HMRC’s responsibility to collect repayments where the borrower is working in the UK.
The Student Loans Company (SLC) is directly responsible for collecting the loans of borrowers outside the UK tax system. Maintenance grants are also available under certain circumstances. The grants do not have to be repaid but do reduce the amount of maintenance loan a student is entitled to.
A special Repayment of Teachers Loan (RTL) Scheme was operated as a pilot for teachers beginning in the academic years 2002/03, 2003/04, 2004/05. The scheme meant that qualifying teachers were effectively not required to repay their student loans. The scheme was closed to new applicants after the academic year 2004/05.
The RTL scheme continues to be available to teachers using the scheme as long as they remain in eligible employment. The scheme works by the government meeting the tax and NICs costs on the teacher’s behalf, so the teacher gets the full value of the write-off.
Planning note for student loans
As a general rule, students that have finished their studies and entered the workforce must begin to make loan repayments from the April after they have finished their studies or when their income begins to exceed the annual threshold. The annual threshold amounts for 2018-19 is £18,330 for plan 1 and £25,000 for plan 2.