What has tax got to do with it?
⚠️ Please note that sometimes links from this website will go directly to our main Low Incomes Tax Reform Group’s (LITRG) website.
Yes, this is a 'tax guide' for students. But we need to talk about student loans as well. Why? Because the main way of repaying loans taken out since 1998 is via the tax system, so you will deal with both the Student Loans Company and HM Revenue & Customs when you leave or finish your studies and start paying back what you owe.
Student loans are borrowings from the UK government to help you live and pay your course fees. You usually pay them back when you leave or finish your studies. How much you can borrow depends on your personal circumstances, but we do not cover that aspect of student loans. If you are wondering how much you can get, we suggest you look at the student finance section on GOV.UK.
Which student loans are repaid through the tax system?
Our guidance is about income-based or income-contingent loans, which were first introduced in the autumn of 1998 and are repaid via the tax system.
We do not look at the 'mortgage-style loans' in place up to autumn 1998, because the repayments for those work differently. If you think yours is a mortgage-style loan, take a look at the Student Loans Company's repayment website.
There are two main types of income-contingent loans, which are referred to as 'Plan 1' and 'Plan 2' loans. Which one you have depends on when you took out the loan and which part of the UK you studied in – England, Northern Ireland, Scotland or Wales. It is possible to have more than one type of loan if you have been on more than one course and one started before 1 September 2012 and one afterwards. You should contact the Student Loans Company (SLC) if you are unsure which type of loan you have.
From April 2019 repayments will start for postgraduate loans. The way repayments are calculated for postgraduate loans is different to repayments for Plan 1 and Plan 2 loans and we explain more about this further in this section.
Both Plan 1 and Plan 2 loans are repaid via the tax system, and repayments on Plan 2 loans started to be collected from April 2016. Repayments of student loans are not deductible expenses for tax purposes.
In the subsequent pages, we cover how and when you pay back your student loans, whether you are an employee or complete a Self Assessment tax return. To use this guidance you need to select whether you are repaying a Plan 1, a Plan 2 or a postgraduate loan or a combination of these loans
We also cover what to do about repaying your student loan if you go abroad for more than three months.