For any Masters course taken from the 1st August 2016, there is now an option to apply for a Postgraduate loan to help with living costs and course fees.
The Postgraduate Loan will be repaid alongside any other student loans an employee may have and will be charged interest from the day the first payment is received. The earliest an employee may start repaying a Postgraduate Loan is April 2019, and they will only begin repaying it when their income is over £21,000 per year.
The repayments will be worked out based on 6% of their income over the lower earnings limit (LEL). This is worked out as £21,000 per year, £1,750 per month or £404 per week.
From 6 April 2017 the student loan repayment threshold for plan 1 will change to £17,775. The Plan 2 threshold will remain at £21,000. The SL1 Start Notice or starter declaration will direct you to which plan type should be used.
If you receive an SL1 start notice for someone for whom you are already making deductions, check that you are using the plan type shown on the latest SL1 and update this if necessary. The Starter Checklist is a good way of helping you to identify if a new employee needs to repay a student loan.
This information will help you to start deductions using the correct plan type from the first available pay date. The starter checklist was updated in April 2016 and contains the correct questions for you to ask your employee. Check to make sure you are using the latest version.