Student Loans. What are they and how do they work? Who are the Student Loan Company?

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Student Loan

Student Loans are made by the Government to help meet students' expenses whilst they are attending courses in higher education.

Under a new student loan scheme (relating to courses starting after August 1998) the Inland Revenue is responsible for collecting repayments of student loans. (The issue and administration of the student loans continues to be handled by the Student Loans Company. The Student Loans Company is wholly owned by the UK Government and operates within the policy context set by the Government, Scottish ministers and the legislative framework)

Repayments start once the student loan borrower has started work and has earnings at a rate exceeding £10,000 a year. (Or, once the student loan borrower has started self employment and has profits in excess of £10,000)

The threshold will increase to £15,000 from 6 April 05

In PAYE cases repayments are deducted from earnings by the employer each pay day, using the Student Loans Deduction Tables, (supplied by the Inland Revenue)

The employer is responsible for recording and handing over the repayments to the Inland Revenue along with tax and NICs.

 

Source : Inland Revenue web site