Postgraduate Finance

To make sure the loan is in place for your first semester in September, students need to apply as soon as the forms are available in May/June.

Yes. In the early days of student loans, the government consulted on penalties to stop people repaying early and avoiding interest – thankfully the mass of feedback they received was against the idea and it was scrapped.

The loan is paid directly to you. You can use it for your course fees and living costs. The Department for Work and Pensions (DWP) may take account of the loan when working out any benefits you receive. The amount you’ll get depends on when you started your course. It isn’t based on you or your family’s income.

If your course starts on or after 1st August 2024, you can get up to £12,471.00 maintenance loan only for a year. Part-time and online courses spread the cost over the length of the course.

You get the first payment after your course start date, once your university or college confirms that you have registered. It will be paid in instalments throughout the year.

Repayments on Postgraduate loans depend wholly on the amount you earn and if you earn under £21,000 you’ll never repay a penny. All repayments are taken directly from your salary by HMRC meaning you’ll never need to worry about making or missing a payment. If you earn over £21,000 per year and your income changes to below £21,000, repayments will automatically stop. You will repay 6% of any amount over £21,000. For example:

• If I earn £22,000 a year, how much will I repay? £22,000 is £1,000 above the threshold meaning you will repay 6% of £1,000. This equates to £60 a year or £5 a month.
• If I earn £31,000 a year, how much will I repay? £31,000 is £10,000 above the threshold meaning you will repay 6% of £10,000. This equates to £600 a year or £50 per month.
• If I earn £40,000 per year, how much will I repay? £40,000 is £19,000 above the threshold meaning you will pay 6% of £19,000. This equates to £1,140 per year or £95.00 per month.

No. After 30 years any amount you currently owe is wiped out, so if for 30 years you earn £21,000 a year, you won’t have repaid a penny and your debt will be clear. The reality is only those on high incomes will ever repay their loans in full. It’s important to note that not repaying much because you’re just over the threshold isn’t a bad thing. These loans are designed as more of a graduate tax rather than a loan.

The interest rate is set at the rate of inflation (RPI) plus 3%. The interest rates are as follows:

• While studying – Your loan accrues inflation plus 3% of the outstanding balance. This continues until the first April after graduation;
• After studying and earning under £21,000 – Your loan accrues inflation only;
• After studying and earning between £21,000 & £41,000 – The interest rate will gradually rise from RPI to RPI plus 3%. The interest rate rises at 0.00015% per every pound earnt. Or to put it another way, if you earn £1,000 more, you accrue 0.15% interest;
• After studying & earning over £41,000 – Your loan accrues the full RPI inflation plus 3%.

Please note that all the above scenarios assume that inflation is positive (prices rising). It’s not yet known what would happen in a period of deflation.