Guidance

Advanced Learner Loans: a guide to terms and conditions

Updated 4 December 2023

Applies to England

1. What’s this guide about?

This guide applies to learners who take an Advanced Learner Loan for eligible courses.

It explains what you’re committing to when you take out an Advanced Learner Loan. It’s important you carefully read and understand this guide as it contains information about the terms of your loan and repayment. Please save a copy.

From time to time government regulations change and these changes could affect the terms of your loan. This guide will be updated to reflect any changes and it’s your responsibility to make sure you have the most up-to-date version. Check www.gov.uk/advancedlearnerloan regularly to make sure you have the most up-to-date version.

If, on reading this guide, you still have questions about your loan, visit www.gov.uk/repaying-your-student-loan

Alternatively you can contact the Student Loans Company (SLC) using the contact details on page 4.

1.1 Making the right choice

It’s important you consider your own circumstances and look into all options for paying for your course before choosing to take out a loan. You can get impartial money advice from the Money Advice Service at www.moneyhelper.org.uk

1.2 Further information

If you still have questions about the terms of your loan after reading this guide, go to www.gov.uk/repaying-your-student-loan

2. Who does what?

2.1 Department for Education (DfE)

Your Advanced Learner Loan contract is with the Secretary of State for Education (DfE). Please see the Terms and Conditions on the loan application form for more details.

2.2 Student Loans Company (SLC)

SLC is responsible for:

• paying your loans to your college or training organisation

• keeping details of your account, including adding interest and collecting repayments providing a statement each year (once you’ve started making repayments) and answering questions about your loan

Student Finance England

Advanced Learner Loans are administered by Student Finance England (SFE), a service provided by the Student Loans Company.

Useful SLC Contact details:

Customer Support Centre

Can help with:

• repaying your loan;

• the application process and timetable; and progress in assessing your application

Call 0300 100 0619

Monday to Friday: 8am - 8pm

Saturday: 9am - 4pm

Or write to:

Advanced Learner Loans, PO Box 302, Darlington, DL1 9NQ.

For further information on repayment go to: www.gov.uk/repaying-your-student-loan or call 0300 100 0619.

2.3 HM Revenue and Customs (HMRC)

HM Revenue & Customs (HMRC) collect student loan repayments from employers through the UK tax system.

2.4 Your employer

If you’re employed, your employer collects student loan repayments on behalf of HMRC and takes repayments direct from your salary in a similar way to tax (PAYE) and National Insurance contributions (NICs). If you have any questions about how your repayments are collected through the tax system, speak to either your employer or HMRC.

3. Your responsibilities

The Advanced Learner Loan agreement is a contract. When you take out an Advanced Learner Loan, you’ll sign the Terms and Conditions to confirm you’ve read and understood them. You must agree to repay your loan in line with the regulations that apply at the time the repayments are due and as they’re amended. The regulations are subject to change.

3.1 You need to provide complete and correct information

You must make sure you provide complete and correct information when you take out the loan and you must tell SLC about any changes to these details during the application process; while you’re at college or training organisation and until you’ve repaid your loan in full.

If you don’t give SLC accurate and up-to-date information, you may have to repay the loan as well as any interest in one lump sum.

For example, you must let SLC know if you:

• change your name, phone number or address

• change your college or training organisation

• change your course of study

• have a change to the start or end dates of your course

• don’t begin to study or leave your course

• suspend your studies for any reason

• plan to leave the country

• change your employment status (from employed to self-employed)

3.2 You need to repay your loan in line with the regulations

If you’re employed, you must tell your employer that you have an Advanced Learner Loan (which is an Income Contingent Repayment Plan 5 loan (ICR Plan 5). Repayments will be collected through the UK tax system by employers taking amounts from their salary through the Pay As You Earn (PAYE) system. If you’re a self-assessment customer or are self-employed, you’ll make repayments through the tax self-assessment process. If you live abroad, you’ll repay your loan direct to SLC. The Repayment section which starts on page 6 covers the process in more detail.

3.3 Liabilities

You’ll be liable for any Advanced Learner Loan paid to your college or training organisation regardless of whether you finish your course or gain a qualification.

3.4 Top tips

• Provide SLC with complete and accurate information from the day you take out your loan until it’s repaid in full.

• Keep details of your income, such as payslips or P60s. This is similar to the information you’ll need to keep for general tax purposes and will help to make sure you repay the right amount. Your payslips and P60s will also show the amount of any student loan repayments your employer takes from your salary.

4. Repayment

You must repay your Advanced Learner Loan in line with the contact and the regulations.

4.1 When you’ll repay

You’ll be due to start repaying your loan in the April after you complete or leave your course. The earliest you’ll start to repay your loan is April 2026.

You’ll only start making repayments when your income is over £480 a week, £2,083 a month or £25,000 a year. If your income falls below these thresholds, repayments will stop and only restart when your income is over these thresholds.

You can make voluntary repayments at any time to pay off your loans more quickly.

4.2 What you’ll repay

Repayments are based on your income, not on what you borrow or the number of student loans you have. This is known as an ‘income contingent’ repayment.

You’ll repay 9% of your income over £25,000 a year. Even if your income doesn’t exceed £25,000 a year but is over £480 a week or £2,083 a month at any point in the year (e.g. if you work overtime) then a loan deduction will be made.

For example, if you’re paid monthly and earn £2,500 before tax you’d repay 9% of the difference between what you earn and what the threshold is:

£2,500 - £2,083 = £417

9% of £226 = £37.53

So your student loan repayment would be £37 in that month.

If your income changes, either rising or falling, your repayment amounts will automatically change to reflect this. A different threshold may apply if you move to live in a country outside the UK. Page 10 explains this in more detail.

Example repayment amounts
Annual Income before tax	Monthly income before tax	Monthly repayment
Up to £25,000	£2,083	£0
£28,000	£2,333	£22
£30,000	£2,500	£37
£32,000	£2,666	£52
£34,000	£2,833	£67
£36,000	£3,000	£82

4.3 How much interest you’ll pay

You’ll be charged interest on the loan from the day your first payment is made to your college or training organisation until your loan has been repaid in full. The interest on your loan will be based on inflation Retail Price Index (RPI).The interest rate will normally be set at RPI only.

For the latest interest rates go to www.gov.uk/repaying-your-student-loan

5. How you’ll repay

Advanced Learner Loan repayments will be collected through the tax system.

5.1 What happens when you’re employed

If you’re an employee paying UK tax, your employer will take repayments from your pay, along with tax and National Insurance. You will see the deductions on your payslip.

SLC will tell HMRC when you’ve finished or left your course and give them details such as your name and National Insurance number. HMRC will check to see if you’re working and if you are, they’ll tell your employer that you have a loan (but not how much you owe).

When you change your job or start work, you may be given a P45 by your old employer. In this case, your last employer should put a ‘Y’ in the student loan box to let your new employer know they should start to take student loan deductions. Your new employer may also ask you to complete a starter declaration before they can start paying your salary.

You should also inform your new employer that you have a student loan.

5.2 How employers know how much to deduct from your pay

HMRC will let your employer know how much to take from your pay.

If your pay is above the repayment threshold for your loan, your employer will take repayments and pass them to HMRC. HMRC will send this information to SLC, who’ll then update your account.

SLC will make sure the correct amount of interest is charged to your account, so you won’t be charged any extra interest even if your repayment details take some time to reach SLC.

It’s important to understand repayments taken by your employer will be worked out on individual pay periods – not on your total income for a whole year. By pay period, we mean how often you get paid. So, if you’re paid monthly, repayments will be taken and calculated each month. This means that if your income varies each month, you could pay back more some months than others.

5.3 Changing jobs

You must tell your employer you’re responsible for making student loan repayments and have an Advanced Learner Loan (which is an Income Contingent Repayment Plan 5 loan). If your repayments don’t start when they should, you should first tell your employer. If your employer can’t sort the matter out, you should contact SLC to help you.

5.4 Refunds of repayments made when income is below the threshold

It’s possible you’ll make some repayments during the course of a tax year even though your total income for that year is less than the threshold. In certain circumstances, you might be able to apply for a refund at the end of the tax year, for example if you got a bonus and you had a deduction taken, even though your annual salary was below the threshold.

SLC won’t make refunds unless you ask them to do this and will be unable to make refunds until HMRC have confirmed your total earnings and total repayments after the end of the tax year. Of course, you may not want a refund because these repayments will reduce the amount you owe so you’ll pay off your loan more quickly. SLC don’t refund any repayments you’ve made voluntarily.

5.5 Employees who are asked to make self-assessment returns by HMRC

If you’re an employee who also gets a tax return under the self-assessment (SA) system, you may have to make some loan repayments with the return, as well as those taken by your employer. The total amount of student loan you have to repay for the year will be based on your total income for the year – that is, all your PAYE income plus any extra self-employed income and any unearned income (if it’s above £2,000 a year). You can get credit in your tax return for any student loan amounts your employer has already taken during the year so you don’t repay too much.

Like PAYE, the SA system will work out your loan repayments based on your income above the threshold, at a rate of 9%. Any SA payment will be due on 31 January following the tax year of your assessment. You can find information on how to fill in your SA return in the guidance and booklets provided by HMRC.

If you pay UK tax and you get a self-assessment tax return, you should use this to declare student loan repayments. You must fill this form in correctly and return it on time. You must also pay your tax and student loan repayment on time. If you don’t do this, you may have to pay interest and financial penalties. This is because student loans will be treated in the same way as tax for the purposes of self assessment. Please note that if you’re self-assessed, your occupational pension will also be subject to your overall loan repayments.

5.6 What happens if my employer goes out of business or doesn’t pay my deductions to HMRC?

As long as you have evidence that deductions have been taken, such as your payslips, SLC will credit the full amount of the repayments to your account.

5.7 What happens if you’re self employed

If you’re self-employed, you’ll have to send HMRC a tax return each year under the self-assessment (SA) system. Your student loan repayments will be due as part of your SA bill for your tax. The student loan repayment will be based on all your gross income over the threshold, including all your unearned income (for example, dividend income from shares) if it’s more than £2,000 a year. There are some general points to remember when working out your income each year.

• the income of your husband, wife, partner, parent or any other relative won’t be taken into account

• income from Child Benefit and disability benefits, including Employment and Support Allowance, won’t be taken into account

• tax credits won’t be taken into account

• if you make voluntary repayments, you’ll still have to make repayments through the SA system

Remember – if you’re self-assessed, your occupational pension will also be subject to your overall loan repayments.

5.8 What happens if you’re planning to travel or work abroad

If you don’t pay UK tax or you plan to leave the UK for more than 3 months at any point after you complete or leave your course (whether this is temporarily or because you live in another country), you’ll make repayments direct to SLC.

You must let SLC know before you leave the UK. If you don’t, they can charge penalties on your loan and where necessary, ask you to repay the full amount of loan plus interest and penalties in one lump sum.

SLC will ask for details of your income and will work out how much you should repay each month. SLC will write to you with more details about your repayment options when you’re due to start repaying although you can make voluntary repayments at any time.

They’ll change your income into pounds sterling and tell you the amount you need to repay each month in British pounds sterling.

Your monthly repayment schedule is worked out using the same rules as for those who stay in the UK. So, you’ll repay 9% of your income over the repayment threshold. However, it’s possible the income threshold for the country you’re living in won’t be the same as in the UK, it could be higher or lower.

SLC will ask you to make repayments in pounds sterling. You’ll be responsible for any costs involved in converting the currency and you’ll have to pay any charges your bank makes to transfer funds to SLC.

If you move abroad or are no longer responsible for paying UK tax and you fail to make repayments that are due or fail to give SLC the information they ask for, you may have to pay penalties. There are 2 specific instances when these penalties may apply:

• you may have to pay the costs of any agents which SLC employ to find you

• if you fail to give SLC full information on your yearly income, your repayments will be a fixed amount

You may have to repay the total loan in a lump sum.

If you don’t give SLC details of your income, you may be charged a fixed amount depending on where you live, which may be higher than the repayment amount due based on your actual income. If you don’t repay this amount the SLC may take legal action against you.

5.9 What will happen if you have more than one loan

More than one Advanced Learner Loan

After completing your first course, you may want to study another course. If you’re eligible for, and take out, an Advanced Learner Loan for this further study, and your income while you’re studying is higher than £480 a week, £2,083 a month and £25,000 a year, you’ll continue to make repayments on your original loan.

Although SLC will deal separately with the loan for your next course while you’re studying, you’ll only get one statement each year covering all of your loans. Statements will only be issued once you start to repay.

A mixture of Advanced Learner Loans and other HE student loans

In most circumstances, you’ll have to repay the loans you took out for each course in line with their terms and conditions which may mean that you’ll continue to make repayments on your original loans while you’re studying.

For example:

A student has an Advanced Learner Loan for a Level 3 Certificate in French and a ‘post 2012 HE reforms’ loan for a degree in Business Administration both of which are in repayment status. The student makes a voluntary repayment of £100 but does not specify which loan balance the repayment should be allocated to.

The voluntary repayment will be split proportionally across both loans according to the outstanding balance of each type of loan. In this example, the outstanding balance of the Advanced Learner Loan is £4,000, and the outstanding balance of the ‘post 2012 HE reforms’ loans is £6,000. The repayment will be split as follows: £40 will be allocated to the Advanced Learner Loan and £60 will be allocated to the ‘post 2012 HE reforms’ loans.

5.10 When will loans be cancelled?

There are circumstances where your loan may be cancelled and you’ll never have to pay it back, such as if you die before you pay the loan off or if you become disabled and permanently unfit for work.

Any loan remaining 40 years after you’re due to start making repayments will be written off.

You must have made all repayments based on your income until that date. If not, in some cases, SLC may recover any amounts you still owe up to that date.

If you would like to know more about the circumstances in which loans will be cancelled, visit: www.gov.uk/repaying-your-student-loan

5.11 What happens if you take out a loan for a QAA Access to HE Diploma

If you chose to take out a loan for a QAA Access to HE Diploma and then progress to a Student Finance England funded higher education (HE) course, SLC will write off the balance of your first Advanced Learner Loan, once you complete your HE qualification. You must complete your HE course, and at least one QAA Access to HE Diploma to get the balance of your QAA Access to HE Diploma loan written off. You cannot get your loan written off if you’ve only ever withdrawn from a QAA Access to HE Diploma. However, if you complete one QAA Access to HE Diploma, any other loans for QAA Access to HE Diplomas you’ve withdrawn from, will also be written off. If you self-fund an HE course eligible for SFE funding, you may also be eligible to get the balance of your QAA Access to HE Diploma loan written off.

5.12 Making extra repayments

You can pay off your loan more quickly by making extra repayments voluntarily. You can do this anytime at: www.gov.uk/repaying-your-student-loan

If you do choose to make additional voluntary repayments directly to SLC, you’ll repay your loan off more quickly. However, any voluntary repayments you make won’t affect the amount collected through the tax system. So, if you’re employed, your employer will still have to take amounts from your salary. If you’re a self-assessment customer, you’ll still have to repay the amount due based on your income for the year. You can’t get a refund of any amounts you repay voluntarily, unless you’ve finished paying off your loan and repaid too much.

5.13 Coming to the end of repaying your loan

When you’re near the end of your repayments, SLC will contact you to discuss moving to repaying by Direct Debit. However, if you know you’re getting near this point, you should get in touch with SLC to arrange to repay your balance in this way.

This is a voluntary scheme which lets you opt out of making your repayments through PAYE and instead make Direct Debit repayments directly to SLC. It’s recommended you do this to help make sure you don’t over repay your loan. You’ll have to pay your Direct Debit every month on the agreed date. If you fail to make the payment, SLC may remove this option and you’ll have to go back to repaying your loan through PAYE.

To find out more about the Direct Debit scheme go to www.gov.uk/repaying-your-student-loan

It’s important you keep track of your repayments. If you don’t, then there’s a chance you could pay back more than required.

Your payslips will give you a regular update of what you’re repaying and your P60 form will show your total repayments in a given year. It’s important you keep hold of them, just as it’s important to keep them safe for tax purposes.

SLC will do everything they can to make sure you don’t over repay at the end of your loan. However if you don’t switch to repaying by Direct Debit, you’ll probably over repay. If this happens, you’ll get a full refund.

5.14 Repayment plan 5

If you have a credit balance when your loan has been repaid in full, interest will accrue at the rate of RPI unless a Prevailing Market Rate cap is in effect.

Interest will accrue at RPI for a maximum of 60 days from the date we let you know about a refund you may be due. Interest will stop accruing after 60 days or from the day you are refunded, whichever comes first.

For more information go to www.gov.uk/repaying-your-student-loan

5.15 Sharing information

HMRC can legally give SLC information about your repayments. However, HMRC can’t give SLC any information about your tax affairs, as these are confidential. Also, neither your employer or HMRC will get any details about your loan account, other than that you have a loan and which threshold you’re on. The applicable data protection legislation in the UK covers personal information passed between SLC, HMRC and the Department for Work and Pensions. The Student Loans Company (SLC) are a Data Controller under the relevant data protection legislation. The Secretary of State for Education is a joint Data Controller for your information. For more detailed information about how your application will be processed and with whom your information will be shared and for what purpose, go to www. gov.uk/advanced-learner-loan

5.16 Other deductions from income

There may be other deductions from your income that need to be considered when your repayments are worked out. For example, if a court or a local authority has placed an Attachment of Earnings Order (AEO) on you, or if the Child Support Agency has placed a Deduction from Earnings Order (DEO) on you.

If one of the orders is to collect Council Tax or Community Charge, your employer won’t take student loan repayments until that order has been cleared. Orders to collect child support, fines or maintenance are dealt with before the student loan amount. And, the amount of student loan taken may be limited so your take-home pay (your pay after deductions) doesn’t fall below any protected level set by the court. Any court orders to collect other debts are dealt with after the student loan amount has been taken.

However you repay your loan, if you continue to withhold information SLC ask for and as a result you fail to make repayments that are due, they have the right to take legal action to recover your debt. This means SLC can get a court order to make you repay the total loan plus interest and penalties in a single payment.

This can be enforced through the courts as a civil debt whether you’re in the UK or living abroad.

6. What to do if you’re not satisfied

6.1 Complaints

If you’re not satisfied with the level of service you’ve received, you should contact SLC to register a complaint. You can do so by:

• calling 0300 100 0601

• emailing customer_complaints@slc.co.uk

• writing to: Customer Relations Unit, Student Loans Company, 10 Clyde Place, Glasgow G5 8DF

If, having done this, you’re still not satisfied, you can have your case independently reviewed. Independent reviews are usually dealt with by:

• the Student Loans Assessor for services provided by the Student Loans Company

• the Adjudicator for services provided by HMRC

• the Parliamentary Ombudsman for services provided by the UK government, such as DfE (for details, see www.ombudsman.org.uk)

6.2 Appeals

These are different from complaints. You may be happy with the way your account has been handled but you may feel that a decision about your account is not correct and you want to appeal. As in the case of complaints, SLC have procedures for dealing with appeals and you should follow these. Appeals against services provided by SLC are also dealt with by the Student Loans Assessor.

In certain circumstances you may consider using the legal system, for example, a county court, to sort out your problem. If you want to do this, you should first get independent legal advice, for example from a solicitor, a legal advice centre or a Citizens Advice Bureau.

7. Other useful information

You’ll find full details of the conditions for getting student loans in the relevant Student Support Regulations. The conditions for repaying Income Contingent Loans are included in the Education (Student Loans) (Repayment) Regulations 2009 No 470 and as amended (which may be replaced by later regulations).

You can read these regulations online at www.legislation.gov.uk or order them from The Stationery Office (TSO) Ltd (phone order line 0870 600 5522). Or order them online at www.tsoshop.co.uk

7.1 Braille or large print

You can order forms and guides in Braille, large print or audio by emailing with your name, address, customer reference number along with what form and format you require to brailleandlargefonts@slc.co.uk or you can telephone 0141 243 3686.

Please note the above email address and telephone number can only deal with requests for alternative formats of forms and guides.

For more information

• Visit www.gov.uk/advanced-learner-loan

• Visit www.nationalcareers.service.gov.uk

• Speak to your college or training organisation