Student loans: the increasingly complex matter of repayment

The repayment of student loans is becoming increasingly complex due to the growing number of repayment plans. We consider the different plan types, how and when student loans are collected through the tax system and how repayments work if the borrower has more than one type of loan.

From 1998 onwards, income-contingent student loans are usually collected by HMRC on behalf of the Student Loans Company either through a deduction via the PAYE system or through self-assessment tax returns. This article explains about the different plan types, how and when student loans are collected through the tax system and how repayments work if the borrower has more than one type of loan. It also discusses some quirks within the repayment process.

The Student Loans Company’s online repayment service is evolving with increasing options to make changes online. The ‘more frequent data sharing’ process between HMRC and the Student Loans Company should mean that loan balances are updated after every PAYE deduction.