Overseas earnings thresholds for plan 2 student loans

Guidance OVERSEAS EARNINGS THRESHOLDS FOR PLAN 2 STUDENT LOANS * English * Cymraeg You'll only make repayments to your student loan when you earn more than the repayment threshold

amount. There are different repayment thresholds for different countries. Get emails about this page APPLIES TO ENGLAND AND WALES * Publication for Northern Ireland * Publication for

Scotland DOCUMENTS OVERSEAS EARNINGS THRESHOLDS FOR PLAN 2 STUDENT LOANS, 2025-26 HTML DETAILS This guide applies to Plan 2 customers. You’re a Plan 2 customer if you got funding from: *

Student Finance England between 1 September 2012 and 31 July 2023 * Student Finance Wales on or after 1 September 2012 You can also find out the overseas repayment thresholds for Plan 1, 

Plan 4 and Postgraduate Loan repayments. Check out which repayment plan you’re on. HOW THE OVERSEAS REPAYMENT THRESHOLDS ARE SET EACH YEAR Overseas thresholds are based on living costs in

each individual country. This is why the repayment threshold is not always the same as it is for those in the UK. The Price Level Index (PLI) is used to measure the differences in the

general price levels for each country, for example, the costs of food, housing, and transport, to allow a comparable threshold to be set. The repayment thresholds for each country are set

once a year on 6 April.  Changes to this can affect how much you need to repay even if your income has remained the same. The PLI information is taken from the most recent year published by

the World Bank. HOW WE WORK OUT THE EXCHANGE RATE USED EACH YEAR The exchange rate we use to convert your salary to GBP is based on the average currency exchange rates for the most recent

calendar year published by HMRC. These are reviewed every year on 6 April. They won’t show any month-to-month rate changes. HOW WE CALCULATE YOUR GROSS ANNUAL SALARY USING YOUR PAYSLIPS If

you’re paid monthly, we’ll use your income from your last three months’ payslips to calculate your average monthly salary. Then we multiply this by 12 months to total your gross annual

salary. Example:  Month 1 income £2,500 Month 2 income £3,000 Month 3 income £2,750 £2,500 + £3,000 + £2,750 = £8,250 £8,250 / 3 = £2,750 average monthly salary £2,750 x 12 months = £33,000

gross annual salary If you’re paid weekly, we’ll use the average income from your last 12 weeks’ payslips and multiply this by 52 weeks to work out your gross annual salary. If you’re paid

bi-weekly or fortnightly, we’ll use the average income from your last 6 weeks’ payslips and multiply this by 24 weeks (for bi-weekly pay) or 26 weeks (for fortnightly pay) to work out your

gross annual salary. BONUSES AND OVERTIME Any bonuses, overtime, commission and allowances that are: * one off payments will be added to your annual income after it’s been calculated *

regularly received will be included in the calculation of your annual income. SUPERANNUATION Superannuation payments won’t be included when we work out your monthly repayment amount. IF

YOU’RE PAID MORE THAN 12 TIMES A YEAR In some countries employees are paid more than 12 times a year.  Where this happens, we’ll use the income from your last three months’ payslips to work

out your average monthly salary.  This will then be multiplied by the number of pay periods in a full year to calculate your gross annual salary.   HOW WE CALCULATE YOUR REPAYMENT SCHEDULE

We use the “overseas repayment threshold for Plan 2” table to calculate your repayment amount, by using the following steps: * We’ll convert your gross annual salary to GBP by using the

exchange rate for the country you’re living in. * Then we’ll take away the “repayment threshold (GBP)” for that country from your annual salary. * You’ll repay 9% of the amount left over.

This is split over 12 months to give you your monthly repayment amount. For example: You’re on Plan 2, living in Spain and have an income of €33,000 a year. Your salary is converted to GBP

using the exchange rate for Spain which is 0.848248: €33,000 x 0.848248= £27,992.18. The repayment threshold for Spain is £22,780. This is taken away from your annual earnings: £27,992.18 -

£22,780 = £5,212.18 You repay 9% of this figure (£5,212.18 x 0.09) which is £469.09. This is divided into 12 monthly payments of £39.09 (rounded down to £39). KEEP YOUR EMPLOYMENT DETAILS UP

TO DATE IF YOU’RE GOING OVERSEAS If you’re overseas for more than three months, you need to give us information on how you’re supporting yourself financially. You can update your employment

details online, even to let us know that you’re unemployed. The online service will tell you exactly what information we need from you. This allows us to determine if you’re due to start

making repayments. If you are due to start repaying, we’ll give you an accurate repayment plan based on your earnings or defer your repayments for 12 months if you’re earning under the

threshold.  If you don’t update us, then the fixed monthly repayment shown for the country you’re living in will be expected every month and you may be charged the highest rate of interest

on your loan balance. If repayments aren’t made then an overdue balance will build up on your account. We use the lower earnings threshold to work out how much you’ll repay. We normally use

the lower earnings threshold and the upper earnings threshold to work out how much interest to apply to your balance (RPI plus up to 3%). SIGN UP FOR EMAILS OR PRINT THIS PAGE Get emails

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