• How do I pay off my tuition loan and what is the cost?
The biggest advantage of a Tuition Fee Loan is its cost and repayment method. First of all, you start to pay off your tuition loan only if your earnings exceed the threshold, which is a fixed income threshold for the country where you work. In England, it is around £27,000 however, it is subject to change as the threshold goes up with the national living wage.
If your income is lower, you will not pay back the loan until your earnings increase.
Did you lose your job? Until you find another one, your tuition loan repayments will be suspended. Moreover, the loan is officially cancelled after 30 years. This means that after this period, you no longer have to pay it back, no matter how much of the loan you have returned so far. What’s more, if during this time you have never earned the income that would allow you to exceed the threshold, then you will not pay a pound for your studies in the UK! In other words, you don’t get paid – you don’t pay back.
We assume, however, that appropriate studies in England will allow you to find well-paid employment, which will exceed the threshold. Does this mean that a good deal of your paycheck will go to your tuition loan and you will only have a few pounds left to live on? None of these things! Tuition Fee Loan is repaid on extremely preferential terms.
If you exceed the income threshold, your tuition loan instalment will be 9% of the amount by which you exceed this threshold. Let’s emphasize it again: 9% on the surplus above the income threshold, not on all income!
Importantly, your UK tuition fee loan repayment is withheld every time you stop work, including going on maternity or paternity leave.