Tracy Fern Senior Funding Officer Brunel University & Ingrid Samuels Senior Adviser ARC, Union of Brunel Students

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1 Tracy Fern Senior Funding Officer Brunel University & Ingrid Samuels Senior Adviser ARC, Union of Brunel Students

2 Repaying your Student Loan

3 What is an Income Contingent Loan? Since 1998 students have been receiving Income Contingent Loans. This means that your repayments are based on your income, not on the amount you borrowed. An Income Contingent Loan is the money that you borrowed to help pay for your studies. This must be repaid. Your Income Contingent Loan can be made up of either a Maintenance Loan, a Tuition Fee Loan, or both. It does not include any Maintenance Grant or Brunel Bursary as these do not normally need to be repaid.

4 What happens during repayment and who do I deal with?

5 Income Contingent Loan repayment (ICR) The Student Loans Company will collect 9% of your earnings above the threshold, which is 15,000 a year or 1,250 per month before deductions, through the UK Government s tax system, Pay As You Earn (PAYE) Payments will be taken automatically from your pay without you having to do anything.

6 When do I repay my loan? You will start to repay your student loan in the April after you graduate or are no longer on your course and as long as you are earning over the repayment threshold. E.g. If you graduate in June 2011, your repayments start in April If you are not working or will be earning less that the threshold, you won t have to make repayments. Between the time that you finish your course and the following April, the SLC will notify HMRC that you are due to start repaying your loan.

7 When you start working, you should let your employer know that you have a student loan. Your employer will work out and take off any student loan repayments that may be due each pay period. If you will be paying your tax through self-assessment, you will be expected to work out any student loan repayments due and make the payment to HMRC yourself. At the end of each tax year your employer will tell HMRC about your student loan repayments. The HMRC will then notify the SLC at the end of the financial year.

8 How much do I repay? How much you repay depends on your income. Your repayment is worked out as 9% of anything over the threshold. The threshold varies according to which country you are living in due to the cost of living. Unearned income such as interest on savings may be included if it is more than 2,000. If your combined earned and unearned income is more than 15,000, you will have to make repayments.

9 What if my income changes? If your income rises or falls during the tax year (the tax year runs from 6 th April to 5 th April), your repayment amounts will change to reflect this. You will have money taken from your salary to repay your loans during any pay period where your earnings are more than the weekly/monthly threshold. Pay period means each time you receive your salary, which could be every: week/two weeks/four weeks/ calendar month.

10 If you generally earn less than 15,000 but due to receiving a bonus or by working an additional shift, your salary takes you over the weekly threshold, you would make a repayment based on the amount that took you over the weekly threshold figure. E.g. If you normally earn under the weekly threshold of 288 and worked overtime which put your weekly pay up to 350 for that week, you would make a repayment based on this amount = 62 Repayment worked out on 9% of 62 which is 5.58 for that particular week. At the end of the end of the tax year, you can apply for a refund of the repayment by sending in your P60 as long as your total income remains under the threshold of 15,000 per annum.

11 Thresholds and repayment amounts Income each year before tax Monthly Salary Monthly repayment Up to 15,000 1, ,000 1, ,000 1, ,000 2, ,000 2, ,000 2, The repayment threshold is worked out on income earned BEFORE deductions.

12 Do I pay interest on your loan? You are charged interest on your loan from when you receive your first payment until you have repaid it in full. The interest rate can vary from year to year and even during the year. The interest rate is published on the repayment website: and also in national newspapers. Student loans are not commercial loans and the interest is low. This means that the amount you pay back will broadly be the same as the amount you borrowed.

13 How can I repay more quickly? You can choose to make voluntary repayments on top of those through PAYE, in order to pay back your loan more quickly. Payments can be made through the repayment website or by phone or post using the following methods: Direct Debit Debit or Credit Card Standing Order Cheque

14 When do I get a statement? You will be sent an interim statement before you start repayments which will tell you how much you owe. The SLC will issue you with statements, generally by the September after the end of the tax year. The information that the SLC hold is based on information received from HMRC, which in turn is received from your employer. This information can be out of date by the time the SLC receive it.

15 What documents should I keep? If you are repaying through PAYE, your payslips will show any student loan repayments taken for each pay period but not a running total for the tax year. It is very important that you hold on to all of your payslips and any other evidence of income. You should ensure that you keep your P60 safe too as this will confirm the total amount of student loan repayment that has been taken for the tax year.

16 What if I think my payments are due to end? The SLC will contact you directly when they believe that you will shortly be finishing your repayments. This is based on the information that they receive from HMRC. You will be asked if you wish to opt out of PAYE and onto Direct Debit. This should ensure that you do not overpay.

17 Keeping track of your payments It is important that you keep track of your repayments. You can check your account online at the repayment website, Keep an eye on your repayments, particularly as you get to the end of your repayments as you will probably overpay. If this happens, you will be able to get this refunded.

18 What happens if I have more than one job? If the total earnings from all your jobs is less than 15,000 for the year, you will not have to make repayments. If your earnings in one job is more than 15,000, your employer will automatically make a loan deduction. Each employer will give you credit for the full 15,000 threshold. If the sum of your earnings from all your jobs exceeds 15,000, the HMRC will send you a tax return to make a selfassessment of the loan repayments you owe for the whole year.

19 What if I am disabled? Any disability-related benefits that you receive will not be counted towards the 15,000 threshold, even if you pay tax on them. If you receive a disability-related benefit and are medically confirmed as permanently unfit for work, you can apply to have your loan cancelled.

20 What if I go abroad? If you are overseas or plan to go overseas for more than three months, you must fill in the overseas income assessment form which is available from Loans are repaid manually directly to the SLC at 9% over the threshold. The threshold is variable in each country to be in the same proportion to the equivalent standard of living. If you think that you may not be in regular contact whilst you are away, you may want to grant power of attorney to someone else to act on your behalf.

21 Student Loan repayment online account Log in using your SLC online account details using: Customer Reference Number (formerly known as ART ID) Internet Password Secret Answer You can use your online account to: View your balance Update your personal details Make a payment to your loan Work out your balance since your last statement You can also make card payments to someone else's account. You will need their Customer Reference Number and their surname.

22 Debt Busting Strategy

23 Debt Busting Strategy Take responsibility for your debt/finances. Get into the right mindset and formulate your strategy YOU ARE THE MASTER OF YOUR OWN MONEY DESTINY

24 Debt Busting Strategy 5 steps to achieving your Money Destiny goal: 1.Know where you are 2.Identify where you want to be 3.Understand and master the psychology of money 4.Create a plan and take consistent action 5.Create a support network

25 Debt Busting Strategy Cause Power to Change Responsible Control of outcome Choice Self respect Proactive Results Feedback/Learning Growth Survivor Effect No power to change No responsibility taken No control of outcome No choice Helplessness/anger Reactive Excuses Failure Stuck Victim

26 Debt busting strategy Are you a Money Drunk?* The Compulsive Spender Buy things to feel good or relieve anxiety. May return or hide purchases. Impulsively buy things you don t need and can t afford The Big Deal Chaser Refuses to watch their money because one big deal is going to make everything alright. Get angry if schemes are questioned. Spend the big deal before you win/get it *From the Money Drunk by Mark Bryan and Julia Cameron

27 Debt busting strategy The Maintenance Money Drunk Salary is often the only thing you like about work. Can grow bitter or numb from inability to pursue or name dreams (or too scared to risk security to pursue them) When I have enough money I ll. Feel the need/deserve to spend money to make your life better/worth living.

28 Debt busting strategy The Poverty Addict Feels morally superior to people with money. Don t forget money owed to you. Deprive yourself of things you could really afford. Live a restricted life due to lack of money. The Cash Co-Dependent Co-sign foolish financial plans even when you feel you know better. May lie and tell friends/partner/parents you have less money than they do. Afraid to say no to friends/partner/family about money.

29 Debt Busting Strategy Ask yourself what is stopping you achieving your Dream goals. Think about that flabby spending/mouldie oldies

30 Debt Busting Strategy

31 Debt Busting Strategy HERE COMES THE SCIENCE! Calculate your Net Worth - Do you have stuff you can sell/be innovative with your career choice to generate income What is My Investment Fund? Set out your priorities who do you want to pay off first?

32 Debt Busting Strategy MY NET WORTH ASSETS: WHAT I OWN = LIABILITY: WHAT I OWE = TOTAL NET WORTH =

33 Debt Busting Strategy MY INVESTMENT FUND INCOME PER MONTH = EXPENDITURE PER MONTH = INCOME EXPENDITURE = YOUR INVESTMENT FUND

34 Debt Busting Strategy WHO I OWE AMOUNT INTEREST RATE CURRENT MONTHLY PAYMENT MINIMUM MONTHLY PAYMENT PRIORITY Halifax Credit % Car Loan % Uncle Bob 400 0% HSBC Credit % TOTAL

35 Debt Busting Strategy Once you have paid off that debt then close that account/shred that credit/store card and give yourself a REWARD Give yourself 24 hours before you splurge on that must have item. Think do you really need it? REMEMBER YOU CAN BE A ZERONAIRE

36 Debt Busting Strategy RESOURCES Martin Lewis Money Saving Expert: National Debtline - s/ Citizens Advice Bureau - Credit Action Money Advice -

37 Remember We are here for 2 more years Graduate vacancy alerts Degree specific careers consultant Davegilchrist75

Student Loans Company. Repaying your student loan

Student Loans Company. Repaying your student loan Student Loans Company Repaying your student loan Contents Page Introduction 3 How much do I repay? 4 Do I pay interest on my loan? 6 How do I repay? 7 When will I get a statement? 11 Coming to the end