What is a plan 2 student loan in the UK?
Plan 2 student loans are those taken out on or after September 2012 to July 2023 in England or Wales. You'll be on Plan 2 if: You're studying an undergraduate course. You're studying for a Postgraduate Certificate of Education (PGCE)
Plan 2 refers to a student loan taken out from September 2012 onwards, in England or Wales. Older loans (from England or Wales) and loans taken out in Northern Ireland, are called plan 1 loans.
- Student Loan Plan 1 (SLP1) introduced from 6 April 2000.
- Student Loan Plan 2 (SLP2) introduced from 6 April 2016.
- Student Loan Plan 4 (SLP4) introduced from 6 April 2021.
- Postgraduate Loan (PGL) introduced from 6 April 2019.
If you're a Scottish student who started an undergraduate or postgraduate course anywhere in the UK on or after 1 September 1998, you'll be on repayment Plan 4. This means you'll pay 9% of the income you earn over the threshold to the Student Loan Company (SLC). This percentage stays the same if your salary rises.
If you leave the UK for more than 3 months. You must update your employment details to let the Student Loans Company ( SLC ) know you have left the UK. You will need to continue to repay your loan unless you provide evidence that your income is below the threshold.
On Plan 1 loans, your repayments are set as 9% of everything you earn above £18,935, whereas with Plan 2, it's 9% of everything above £25,725. In other words, on exactly the same income, people on Plan 1 loans pay much more each year.
When Plan 2 loans get written off. Plan 2 loans are written off 30 years after the April you were first due to repay.
If you have more than one type of loan, you'll repay them at the same time, as long as your income is over the repayment threshold. Here are some examples of how it could work based on the current UK thresholds. If your monthly income is between £1,657 and £2,274, you'll only make repayments towards your Plan 1 loan.
You start repaying once you earn over a certain amount. The size of your monthly repayments will depend on how much you earn, not what you owe. You'll be charged interest on the loan from the day you take it out. The terms and conditions can change.
A tuition fee loan goes towards the cost of your course, up to a maximum of £9,250 per year – which is the full cost of tuition in most cases – and is paid directly to your university or college. A maintenance loan helps with the everyday costs of being a student like accommodation, food and transport.
How do I know if I have a Plan 2 student loan?
Depending on when and where you took out your student loan, the plan you're on will vary. Plan 2 student loans are those taken out on or after September 2012 to July 2023 in England or Wales. You'll be on Plan 2 if: You're studying an undergraduate course.
Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones. ED will continue to discharge loans as borrowers reach the required number of months for forgiveness.
Repayment plan 5 is a new repayment plan, being introduced for students starting undergraduate and Advanced Learner Loan courses on or after 1 August 2023. You won't be expected to make repayments to your plan 5 student loan until April 2026 at the earliest, even if you leave your course early.
You'll be on Plan 2 if: you're studying an undergraduate course. you're studying a Postgraduate Certificate of Education (PGCE) you take out an Advanced Learner Loan. you take out a Higher Education Short Course Loan.
If you're declared permanently unfit for work or permanently disabled, the Student Loan Company will write off your loan. It'll also be written off if you die.
If you took your student loans out on or after 1 September, 2006, they'll be cancelled 25 years after they first became due. Payment plan 2: Your loans will be cancelled 30 years after they first became due. Payment plan 4: For payment plan 4, your loan cancelation also depends on when you took out the loan.
You'll only repay when your income is over £480 a week, £2,082 a month or £24,990 a year.
Best repayment option: standard repayment. On the standard student loan repayment plan, you make equal monthly payments for 10 years. If you can afford the standard plan, you'll pay less in interest and pay off your loans faster than you would on other federal repayment plans.
Income-Based Repayment (IBR)—Depending on when you first took out loans (before or on or after July 1, 2014), payments are generally 10% or 15% of the borrower's discretionary income, but never more than the 10-year Standard repayment plan amount. The remaining unpaid balance of loans is forgiven after 20 or 25 years.
What are the monthly payment amounts for federal student loans under the Standard Repayment Plan? Under the Standard Repayment Plan, you'll make fixed monthly payments of at least $50 for a period of up to 10 years for all loan types except Direct Consolidation Loans and FFEL Consolidation Loans.
How long does it take to pay back 200000 in student loans?
| Repayment plan | Monthly payment | Years of payment |
|---|---|---|
| Income-Based Repayment (IBR) | $538(first payment) to $1,525(last payment) | 20 years |
| Pay As You Earn (PAYE) | $538(first payment) to $1,525(last payment) | 20 years |
| Revised Pay As You Earn (REPAYE) | $538(first payment) to $1,988(last payment) | 25 years |
Having a student loan will affect your credit score. Your student loan amount and payment history are a part of your credit report. Your credit reports—which impact your credit score—will contain information about your student loans, including: Amount that you owe on your loans.
In the UK, student loan repayments are made at 9% of your pre-tax earnings. But – and here's the important bit – those repayments are only made on earnings that are above a defined earnings threshold. You won't make repayments on anything you earn below the threshold.
If you don't pick a repayment plan, your loan servicer will place you on the Standard Repayment Plan. On the Standard Plan, you repay your loan(s) over 10 years. Your monthly payments on this plan are based on a 10-year schedule and not based on your income or your ability to pay.
No. Your student loan doesn't appear on your credit report, so it won't impact your credit score. However, mortgage lenders might still take your student loan into account when deciding how much you can borrow. That's because student loans can still show up when lenders perform affordability checks.
