After studying in the UK, you might decide it's time to up sticks and move elsewhere. But whilst this sounds exciting, you might be thinking: Where exactly does this leave me regarding my student loan?
Let’s start with the basics:
How Do Student Loans Work?
In the UK, eligible students can be granted government-funded loans to cover tuition fees and living expenses.
These loans must be repaid once students have left their studies and are earning over a certain income threshold.
Generally, students will start repaying their loan the April after their studies. For others, depending on their earnings, it may take a little longer.
When it comes to repaying student loans, for full-time workers, a percentage of their earnings are automatically deducted from their payslips. For those that are self-employed, student loan repayments are usually calculated once they do their annual tax return.
But what happens if you move abroad from the UK after being a student?
What Are The Obligations For Re-Paying Student Loans If You Live Abroad?
After studying, you might fancy a change of scenery and move abroad. It’s true that the South of Spain sounds much more exciting than Blackpool beach. You might be thinking: If I’m working abroad, how will I repay my student loan in the UK?
While being outside the UK does not mean you will stop repaying your loan, things will work a little differently.
Firstly, the minimum income you need to be earning to pay back your loan will vary if you are abroad. This is because earning thresholds change from country to country.
Secondly, your repayments will be dependent on which type of loan you hold:
If you took out a student loan before 1 September 2012, you are on Plan 1. However, if you took out a student loan after 1 August 2013, you are on Plan 2.
Alternatively, if you are a Scottish or EU student that studied in the UK after 1 September 1998, you are on Plan 4.
For each of these plans, there is an easy process to follow to see when you need to start repayments.
How Do I Check My Student Loan Repayments
First, go to the Student Loans Company (SLC) or UK government website. Then, select which student plan you are on. This will allow you to check what the earning threshold and monthly repayments are in the country you live in.
For example, let's say you are on a Plan 2 loan and are currently living in Belgium. You would need to look up which student plan you are on and the country you're in. This will tell you that the earnings threshold in Belgium is currently £27,295 and the monthly repayments will be £335. Voila!
Remember that these figures will be adjusted at the start of every tax year. So, make sure to check the correct figures for the year you are in.
If you are repaying a loan taken out for postgraduate studies, this process is the same.
What Do You Need To Consider When Repaying A Student Loan Abroad?
The first thing to do when it comes to repaying your student loan abroad is to inform the SLC.
Understandably, moving abroad will have its distractions. You’ll want to furnish your new place, taste the local cuisine and explore your new city. But don’t let yourself forget to actually let the SLC know about the move.
If you leave the UK for more than 3 months, you must tell the SLC. They will work out how much you need to pay in the country you are in. They will then notify you accordingly.
This will be converted into British Pounds so don’t worry about complicated conversion sums.
Once the SLC has done this, you can begin to make the repayments. This means considering the practical aspects of transferring your loan repayments.
The SLC accepts payments through your online account or via International Bank Transfer (IBAN).
The moral of the story is, as long as you keep in communication with the SLC, everything will run smoothly.
No one wants to be worrying about their student loan whilst starting a new life abroad. So don’t complicate the process. Just stay aware and leave the bulk of the work to the SLC. They will keep everything in check and provide all the guidance you need.
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