it is time to think
about how you are going to pay back the hundreds, if not thousands
of pounds worth of debt you have accumulated through student loans. But
don't worry you may not have to start paying it back straight away.
Here follows a summary of the system for replacement laid out by
Summary for the Repayment of Student
The Teaching and Higher Education
Act 1998 introduced income contingent student loans to replace the
former type of loan, usually referred to as 'mortgage style' loans.
The regulations governing the repayment of income contingent loans
have now been drafted and are the subject of this consultation.
The repayment regulations will come
into force on 1st November 1999 although no repayment
of the loans will be required before 6th April 2000.
The Student Loans Company will be responsible for administering
A borrower will be required to begin
repayment of their loan once their income exceeds a threshold
figure of £10,000 (gross) per annum. Borrowers will not have to
make repayments until the April following their graduation or leaving
their courses. The amount to be repaid will be calculated as a percentage
of income over the threshold level. This percentage rate is presently
set at 9%. Taxable unearned income above the value of £2,000 per
annum will be included in the calculation of the total income of
Borrowers who are self employed will
make repayments to the Inland Revenue through their self assessment
tax returns. Borrowers who have unearned income of more than £2,000
per annum may also be required to make repayments through self assessment.
For most borrowers, the collection
of repayments will be made by employers who will make deductions
from salaries and pass the sums collected to the Inland Revenue.
For more details see the government