New student loan repayment system will be launched by government in 2020
02 January 2020
In a bid to modernise the Student Loans Company (SLC) repayment system, it has been confirmed that a new online service will be implemented in 2020, which will allow former students to manage their student loan balance more efficiently and give them access to the most to up-to-date information regarding their loan.
The new system should replace the rather archaic method of circulating annual paper statements that is currently used for communications relating to student loan balance. Due to the previous introduction of Real Time Information (RTI) and the requirement for employers to send Full Payments Submissions (FPS) each pay cycle, there is now the opportunity for more accurate and up to date information to be displayed online in relation to student loans.
Chris Skidmore, the universities minister, commented:
“With more and more people enjoying the benefits of a university education, it’s only right that graduates have easy access to the information they need about repaying their student loan.
The government is investing in the student loans system to make it as simple and easy for people to use as possible. I urge all graduates to use this new service and to join the direct debit scheme as they approach the end of their loan to ensure a smooth end and not repay more than they should.”
Education Secretary, Gavin Williams also confirmed:
‘Millions of graduates will be able to bin their paper statements and access their student loan account online as part of a major revamp to the system.”
University tuition fees can currently reach as much as £9,250 a year in England, so students can receive a government loan to cover the cost, along with money to assist with the cost of living.
The repayment threshold will increase for the third consecutive year in April 2020, and students will need to earn at least £19,390 prior to paying any student loan deductions under plan type one, and £26,575 under plan type two. Student loans are calculated at 9% of the amount that someone earns that is above the threshold.
Postgraduate loans are taken at 6% over the threshold, which will remain at £21,000 per annum for tax year 2020-21.
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