Student Loans

Student Loans are offered to students to help with paying for education. The most frequent use of a student loan is for payment at university. This type of loan is offered with a lower interest rate to other types of loan making it slightly easier to pay back. The interest rates on student loans are updated annually in accordance with inflation but still remain lower than other loans.

The student loans are provided by the Student Loans Company is paid in three instalments throughout the year with one instalment paid in each of the three terms. The loans do not have to be repaid until the April after the student has finished their course and they are earning £15,000 a year as this is deemed a reasonable amount to be able to start paying back the loan.

The paying back of student loans occurs automatically once they are earning a gross salary of at least £15,000 a year. The pay back occurs through the PAYE system whereby 9% of the student’s salary is deducted to repay the loan.

There is no set time frame by which the entire student loan is to be paid back although if the student reaches 65 and still has not paid back the loan, the loan will be cancelled. If the student has been paying back the loan for 25 years and has still not managed to clear it all then it will also be cancelled.

Student loans help students to afford higher education at university level making it easier for them to cope during their hard years of studying.