A student loan is like a really, really dark joke. Deep down you know it’s the worst thing imaginable but you can’t help but laugh because of how ridiculously terrible it is. In a fantastic sketch, UK comedy trio Victorious Sponge highlight how seriously miserable graduate life can be and how there is a serious knowledge gap between government aid companies and students.
For example, throughout my university career I was told that my student loan would just renew itself year after year. The point isn’t that I was told the truth, the point is that it came from people that definitely didn’t work for Student Loans company.
For any students out there, here is everything you need to know right now about paying your £27,000+ student loans back.
When do you have to repay?
Right, you only start paying back your loan once you’re earning more than £21,000 a year. From then you’ll be paying back 9% of anything you earn over that amount. Unless you’re self-employed, your payments will be taken automatically out of your pay slip.
How do I work out how much I’ll pay a month?
So we’ve established when you start repaying but ideally you’ll work out what to expect when that first dedication happens. Let’s say you’re earning £21,000 (which is actually above the average starting salary in the UK) since your student loan is deducted before tax, your monthly repayment is £26 because it’s 9% of £1,750 – your monthly salary.
What if you dropped out?
Let’s say you dropped out of university, don’t worry, no judgements here. You unfortunately will still have to pay back your loans as soon as your salary tops £21,000. Sorry!
What about interest?
There will be interest on your loan but it depends on what you earn. The interest grows at the rate of inflation so will rise steadily. This won’t affect how much you repay each month, it will just mean you’ll be repaying longer.
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Are those jokes about leaving the country true?
Unfortunately no, you can’t leave the country long enough for your payments to be nullified. If you go abroad to work for more than three months you’ll need to let Student Finance know!