Martin Lewis Student Loan issue after minimum wage rise

North Wales Chronicle

21-04-2025

Those with student loans may now be tipped into the repayment threshold if they work full time.
In a tweet, he raised the issue of the plan 5 student loan repayment threshold, which starts at £25,000 a year.
He said: "A full time worker doing 40hrs a week on the new increased £12.21/hr minimum wage would earn just over £25,000. The Plan 5 student loan repayment threshold (ie English students who started uni since 2023) is £25,000 and is frozen until 2027.
"So in the April after those graduates leave uni, even on min wage jobs, they'll now often need to start repaying (a little) bit of their student loans."
He added in a follow up: "Many people saying 'it's the interest rates that are the killer' actually that's not true. These new Plan 5 loans interest is set at the rate of inflation, that seems good but it distracted from the killer changes to this cohort of students.
"The repayment threshold was lowered to £25,000 so people start repaying on lower incomes. Repayments last 40 years not 30 years.
"For many this effectively increased what they'd likely repay by very roughly around 50% (barring very high earners who'd repay less due to lower interest and the fact they'd have cleared early anyway). It was a huge stealth rise that many missed, as it's tough to explain and people focus on tuition fees (the recent rise in which had trivial impact compared to these changes)."
You could be owed money by the Student Loans Company🚨 Managed to bag yourself a refund? Let me know👇🏻
This varies, but graduates only repay when their income is over the threshold amount for their particular repayment plan, unless they've been overpaid.
Their income is the amount they earn (including things like bonuses and overtime) before tax and other deductions.
The threshold amounts change on April 6 every year.
The earliest they start repaying is:
Repayments automatically stop if either:
The threshold is over £501 a week, £2,172 a month or £26,065 a year.
The threshold is over £547 a week, £2,372 a month or £28,470 a year.
The threshold is over £629 a week, £2,728 a month or £32,745 a year.
The threshold is over £480 a week, £2,083 a month or £25,000 a year.
For a Master's Loan or a Doctoral Loan, the threshold is over £403 a week, £1,750 a month or £21,000 a year.
The Student Loans Company (SLC) will write to anyone who has been paid more student loan or grant than they're entitled to.
They must repay this separately from the rest of their student loan.
Very much yes. And many people have.
You can ask for a refund if:
HM Revenue and Customs (HMRC) will tell your employer to stop taking repayments from your salary when you have repaid your loan in full. It can take around 4 weeks for salary deductions to stop.
This means you may pay back more than you owe.
You can avoid paying more than you owe by changing your payments to Direct Debit in the final year of your repayments.
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If you have paid too much the Student Loans Company (SLC) will try to:
If you've overpaid and have not heard from SLC you can ask them for a refund.