Here’s everything you need to know about your loans as a Leeds student

With misinformation everywhere, here’s what you can actually expect if you take out student loans

3 seconds ago

Abbie Latymer | Guides

Student loan repayments are confusing for everyone, especially when universities across England have been spreading misleading information, according to Treasury Committee Chair Dame Meg Hillier.

Some universities also gave students worked examples of how repayment would work, but for salaries less than the UK average, so students were led to believe repayments could be compared to the “cost of a daily coffee”.

Unfortunately, if you’re in a high-paying graduate role, like trainee solicitor or software engineer, you’ll be wanting shaved gold and special servings of cream for the price of your so-called “daily coffee”.

The BBC also found that over 110 university websites in England provided inaccurate information about when students begin repaying loans and for how long.

With all of this in mind, we thought we’d clarify your Leeds student loans so you can be savvy about your finances.

How does repayment work?

Wide shot studying Leeds student

Students who started studying their undergraduate degree in August 2023 or later are on plan five for student loans. These students are required to pay back 9% of their earnings above their £25,000 threshold.

For example, if you earn £30,000 annually, you earn £5,000 more than the threshold. 9% of £5,000 is £450 and if you divide this by 12, you’d pay back £37.50 per month.

If you’re earning this salary, repayments can be compared to the “cost of a daily coffee”, as Northumbria University put it. However, if in the future you earn £100,000, you’d have to pay £562.50 per month. That must be one boujie coffee.

It’s important to check the GOV.UK website for your specific repayment rates if you started studying before 2023, or are a postgraduate student.

86 days to four years: The 12 Love Is Blind divorces, ranked by how long the couple lasted

Scott from the Love Is Blind reunion got engaged on the show, but Netflix cut it

Vampire Diaries actor ‘tempted’ to get lawyer as he claims co-star Joseph Morgan got him banned

Why is my debt constantly increasing?

Hands typing

Interest starts accumulating from the moment you take out student loans.

Students on Plan 5 are charged interest according to the Retail Price Index (RPI), which is at 4.1% this year. Someone with a total debt of £50,000 currently will have an extra £2,500 added this year. Your new debt (e.g. £52,500) will be charged interest the following year, according to the new RPI.

If you are studying postgraduate, the interest rate is 6%.

Unfortunately, the amount of interest your loan is charged often exceeds the amount you repay. This means, while you are paying the government back, your debt continues to increase.

It’s important to check your plan and your rate on the GOV.UK website, as well as sign into your own student loan repayment account to understand and manage your balance.