Overview

The majority of current lending, for fees and grants, is collected through a repayment mechanism of the UK tax system. This system of collection is known as Income Contingent Repayment (ICR).

The following loans are covered by ICR:

• maintenance loans (all students who entered higher education since 1999);
• and all tuition fee loans

Repayment terms

The time taken to repay is based on income and amount borrowed, not on a fixed time period. The amount to be paid back will depend on the amount borrowed plus the interest charged. Interest is linked to the rate of inflation and is adjusted each year in line with the Retail Prices Index (RPI). Borrowers repay 9% of their income over £15,000 towards the loan. Loans enter repayment status in the April after borrowers finish their course. A repayment is taken in any weekly or monthly period in which the gross salary exceeds the current applicable threshold (£288 per week, £1250 per month or £15,000 equivalent). This continues until the loan is either entirely repaid or until the remaining balance is written off under the rules of the scheme.

There is no maximum monthly repayment, so that an account holder with an arbitrarily high income may repay an entire balance in a single instalment.