Statistical first release for Student Loans in England for 2014-15 financial year
29 June 2015
The Department for Business Innovation & Skills recently published the statistical first release on loan outlays, repayments of loans and borrower activity for English domiciled students.
Figures included are for Income Contingent Repayment (ICR) Loans, which were introduced in 1998/99 and cover publicly owned loans only.
You will be aware that repayment Plan 1 refers to students who began their course prior to 1st September 2012. Payments for Repayment Plan 1 loans are at the rate of 9% of income above the repayment threshold which for the 2015-2016 tax year is £17,335.
For students who began their course on or after 1st September 2012, they will repay their loan under the Terms and Conditions for repayment Plan 2 and their repayment threshold is set at £21,000 from April 2016. They will make repayments at 9% of their income above the threshold.
Borrowers would normally be liable to make repayments from the April after they leave their course, but for administrative reasons, repayments will not be taken through the tax system until April 2016.
Plan 1 and Plan 2 will not be repaid concurrently. In cases where a borrower has both types of loan and the plan 1 loan becomes repaid, no stop notice will be issued to the employer but a plan 2 SL1 will be issued. This will mean there is no interruption to loan repayments. The plan 1 loan will in effect stop as soon as the plan 2 SL1 is applied to payroll and the employees earnings exceed the relevant threshold.
Guidance for employers will be available later in the year – if you have any questions that you would like the guidance to include that will help you understand how to process Plan 2 student loan repayments, please contact the CIPP policy & research team at [email protected].