The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
For taxpayers who took out student loans to fund courses in England and Wales starting on or after August 1998, the repayments of the loan are collected via the payroll or tax return based on a percentage of total income. The repayments collected by HMRC are then paid to the StudentLoans Company.
Those individuals who took out student loans for courses starting before August 1998 made fixed payments direct to the StudentLoans Company with a repayment term of five years. These loans shall not be considered further as there is no interaction with the tax system.
For those who took out student loans to fund courses starting on or after August 1998, there are two different regimes for undergraduates:
Plan 1 ― loans in respect of courses which started between August 1998 and 31 August 2012
Plan 2 ― loans in respect of courses which started on or after 1 September 2012 (also known as post-2012 student loans)
For details of the interest charged on the balance owed under each Plan, see the GOV.UK website. Note that whilst the interest charged under Plan 2 loans is fixed at the retail price index (RPI) plus 3% whilst the individual is studying, after leaving the course, the interest rate varies depending on the level of the individual’s income on a year-by-year basis. See the link under the heading ‘Interest on Plan 2’ on the GOV.UK website.
In addition there are two postgraduate student loans available:
postgraduate master's loan ― available to those starting a master's degree on or after 1 August 2016
postgraduate doctoral loan ― available to those starting a doctoral degree on or after 1 August 2018
The interest charged on the balance of the loan is RPI plus 3%. For the current interest rate, see the heading ‘Interest on Postgraduate Loan’ on the GOV.UK website.
For Plan 1 student loans, the repayments begin on 6 April following graduation (or 6 April following the
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