Student Loans

A student loan is a loan that students can take out to help fund their time at college or university, typically to pay for living costs such as rent, utilities, food and other necessities, as well as educational items like books, laptops and other materials.

In Scotland, student loans are awarded by the Student Awards Agency Scotland (SAAS), and you can easily apply through their website.

A few factors can affect whether you can get a student loan, these include:

  • The university of college you are applying for
  • The course you wish to study on (must be a higher education course)
  • Your age (on the first academic year when your course begins you must be under 60 years of age)

When you apply for other student finance, such as your tuition fees, you can apply for your student loan. Or, if you wish, you can do these separately.

If your household income is £34,000 a year or more, the maximum you can borrow is £4,750 a year. For household incomes that are less than £33,999, a loan of up to £6,750 a year is available. You will need the following things to apply for a student loan:

  • If you have applied before, you will need your SAAS reference number
  • Your National Insurance Number (which you can find on you National Insurance Card, payslip, benefit letter or your P60)
  • You bank account details
  • The name of your university of college you are applying for, and the name of your course
  • If your household income amounts for £33,999 or under, you should provide document to prove this

Student loans, as with any loan, should eventually be repaid. How this repayment is done depends on your type of employment – whether you work for yourself or for someone else.

If you are employed, repayments will come out of your wages automatically once you reach the point of earning on or above the ‘salary threshold’. Currently, the salary threshold is £19,390.

The repayments will show up on your wage slip and they will pause if your salary dips below this threshold, and resume once again if your salary goes up again. You pay 9% of your income over the threshold, and this percentage remains the same even if your income increases.

If you are self-employed, repayments of your student loans are done through your Self-Assessment tax return. The form gives you the option to tick a box indicating that you have a student loan, which you should budget for actively throughout the year in order to make the payments to HMRC (Her Majesty’s Revenue and Customs) by the end of January, when your Self Assessment tax return is submitted.

From the April after your graduation, if 30 years have passed and you have not finished repaying the student loan the debt will be cleared. If you never earn over the threshold amount in 30 years, you may never pay back any of the debt.

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