# Student Loan Repayment Calculator

We are updating the calculator to take account of this. In the meantime, the calculator represents the position before this announcement.

- Bear in mind this calculator is based on a number of assumptions and is looking some thirty years into the future!
- The figures are only broad indicators of potential outcomes and this page should not be considered as financial advice.
- The calculator is not for students who started university in 2011 or before, for whom a very different funding system applies.

A new student finance system based on increased tuition fees and interest-attracting loans was introduced in parts of the UK for university entry from 2012 (read about tuition fees and financial support).

This calculator estimates the monthly repayments that will be due under the new regime, assuming the predicted earnings described below and shown on the page of detailed results.

The results are for illustrative purposes only, since the exact repayments will depend on the actual salary earned throughout the period.

#### Interest

An interest rate of 3% above inflation will be applied from the receipt of the first payment from the Student Loans Company (SLC) until the end of the fiscal year (5th April) following the end of the course.

The interest rate applied after this will depend on the annual earnings of the recipient of the loan:

There will be a threshold below which the rate of interest will be the rate of inflation. This will be 21,000 in the first year.

There will also be a threshold above which the rate of interest will be 3% above the rate of inflation. This will be 41,000 in the first year.

Between these two thresholds, the calculator follows the Student Loan Repayment Ready Reckoner produced by the Department of Business, Innovation and Skills (the BIS ): the rate will increase in proportion to the amount earned over the lower threshold. Therefore, annual earnings of 31,000, for example, would mean that a rate of 1.5% above inflation would be applied in the first year.

The thresholds will increase annually, at the same rate as the national average of earnings. The calculator uses a rate of 2% above inflation for this increase, which is the long-term average.

#### Repayments

No repayments will be due until the start of the fiscal year (6th April) following the end of the course.

After this, the amount due will be 9% of the earnings which exceed a threshold. This threshold will be the same as the threshold below which the rate of interest is the rate of inflation: 21,000 in the first year (see above).

#### Salaries

The calculator assumes continuous employment over 30 years.

The projected salaries used by the calculator are based on the careers of past graduates, and are derived from figures from a number of sources.

The Association of Graduate Recruiters (AGR) provided the current starting salaries for the careers which we list.

Current final salary figures were sourced from a variety of professional, industry-expert salary surveys and guides. These final salaries have then been adjusted to allow for an increase in the national average of earnings of 2% above inflation, over the subsequent 29 years. To do this, we have assumed that the salaries will remain unchanged in relation to each other and to the national average. We have therefore increased the final salaries by 2% for every year, which is a 78% increase over the whole period.

The growth in salary between the starting and final figures for each career follows the pattern of the salary predictions for all graduates in employment in the BIS ‘s Ready Reckoner : higher increases in earnings are expected at the start and at the end of the 30 year period, and lower increases in between.

In addition to expected earnings for particular careers, we give three further options for low, medium and high earnings across the whole graduate population. The figures used are as follows: