Ever wondered that if you lived in another country would you have to pay your student loan back whilst earning in another country? We did!
Our research lead us to discover a massive misconception that if you are abroad you don’t have to repay your student loan and eventually your loan will be cleared. Sounds perfect, but that is incorrect, here’s the deal;
If you are living overseas for 3 months or more you are required to inform the Student Loans company, they will give you a “Self Assessment Form” to fill out, from what you put down on the form (so personal circumstances, income) they will decide how much of the loan you will need to pay off each month you will then pay it direct to them via direct debit. (So it is advisable to keep a UK bank account open for this) Evidence of your income will also be required, payslips would be sufficient.
The repayment schedule will be fixed over a 12 month period so do make sure if you income level drops for what ever reason that you tell them so they can reassess the payment amounts.
Just like in the UK, the Student Loans Company have a repayment threshold, earn over a certain amount and you start paying the loan back. For the UK currently it is earn over £16,910 and you start paying 9% of the loan back. For New Zealand the threshold is currently set at £20,290 which with the current exchange rate is just over $40,000 NZD. So if you are earning over this amount do make sure you contact them!
Apparently this amount reflects on the current economical climate of New Zealand, based on the externally published World Bank data that measures the cost of living in each country. For more detailed information on the World Bank Data click here. (Be warned it may send you to sleep!)
A scare mongering tactic from the student loan company is used in numerous ways! They say if you do not repay your loan or correctly tell them your income when you have moved abroad then you will get default payments of £295.20 (For NZ) billed to you each month! Or fines of £150 for failing to tell them or even asked (worst case scenario) to repay the entirety of you loan back!
It would also be naive to think, “Ah if I don’t tell them they won’t know” As it is likely your employer has told the HMRC that you are moving abroad (that’s if you employer knows?) when they submitted your P45!
Ah, well at least there is only 24 more years to go until our loan is written off completely!