CSLM16025 - SL repayments: calculation of loan repayments: when do repayments stop?
Repayments will stop in the following circumstances:
The loan is repaid
The borrower dies
New lending is made to students (not from Scotland) and is subject to a maximum 25 year term
New lending is made to Scottish domiciled students and is subject to a maximum 35 year term
The borrower reaches the age of 65
The borrower receives a disability related benefit and is permanently unfit for work
In addition, if the borrower emigrates from the UK or is otherwise not resident for tax purposes, HMRC will cease to collect any Student and or Postgraduate Loan repayments and the Student Loans Company will assume responsibility.
The loan is repaid
Repayment of the loan may be by one or more of the following methods
- Deductions from earnings
- Self Assessment
- Voluntary payment to the Student Loans Company
For borrowers nearing the end of their loan who are wholly PAYE or who are a mixture of PAYE and Self Assessment (SA) the SLC offer a direct debit arrangement. This removes the borrower from the HMRC collection process altogether and prevents the borrower from over-repaying their loan.
The borrower dies
If the borrower is employed, the employer will not make Student Loan and or Postgraduate Loan deductions from payments made after death, even if those payments relate to a period prior to death.
If the borrower self assesses, the final year of liability for Student Loans and or Postgraduate Loan repayments will be the year in which death occurred.
If you become aware of the death of a borrower
- Notify the Student Loans Company of the date of death
New lending is made to students (not from Scotland) and is subject to a maximum 25 year term
New lending to students who are not from Scotland is subject to a 25-year maximum term, because of the changes to the age entitlement for new maintenance loans. Existing borrowers retain their existing rights for both new and existing borrowing, however. There are now two kinds of ICR loan as follows
- Lending to borrowers who borrow for the first time in 2006-07 is written off if not repaid within 25 years. This applies to students who
- Enter higher education in 2006-07 (whether or not following a gap year)
- Entered higher education before 2006-07, but elected not to draw down a student loan in previous years
Or who
- Entered higher education before 2006-07 but were not eligible or entitled to receive a student loan in previous years, but who become eligible for one of the loan products in 2006-07
- Lending to other borrowers is written off at age 65
New lending is made to Scottish domiciled students and is subject to a maximum 35 year term
Where Scottish domiciled borrowers borrow for the first time in 2006-07 or later the loan term is subject to a 35 year maximum term.
The borrower reaches the age of 65
If the borrower is employed, the employer will continue to make Student and or Postgraduate Loan deductions from payments made until a Stop Notice is received from HMRC. Note: This will have been authorised by the Student Loans Company on the basis of the borrower’s date of birth.
If the borrower self assesses the final year of liability for Student and or Postgraduate Loan repayments will be the year prior to the cancellation of the loan.
The borrower receives a disability related benefit and is permanently unfit for work
It will be the borrower’s responsibility to negotiate cancellation of the loan with the Student Loans Company. HMRC are not involved.
If the borrower is employed, the employer will continue to make Student and or Postgraduate Loan deductions from payments made until a Stop Notice is received from HMRC.
If the borrower self assesses, the final year of liability for Student and or Postgraduate Loan repayments will be the year prior to the cancellation of the loan.