Advanced Learner Loans
Have you heard about the Advanced Learner Loan?
If you are aged 19 or over and want to study for a level 3 or 4 Certificate or Diploma, you will need to pay your college or training organisation for the cost of your course.
A new loan scheme has been introduced by the government to help learners. The Advanced Learner Loan is easy to apply for, doesn’t take your household income into account and doesn’t involve a credit check.
Here are some of the key facts about the loan:
Repayments are linked to what you earn and not how much you borrowed.
You only have to start making repayments when you’ve finished your course and you’re earning over £21,000 a year (which is £404 a week or £1,750 a month). Until then you don’t need to pay back anything, but you can make voluntary repayments at any time.
You pay 9% of the money you earn over £21,000, before tax. For example, if you earn £22,000 a year, your monthly repayment will be £7 a month; and if you earn £35,000 a year, it will be £105 per month.
Interest is charged on a sliding scale between the Retail Price Index (RPI) and RPI +3%, depending on how much you earn.
Aged 19 or over on the first day of your course. (there’s no upper age-limit)
Starting your course on or after 1st August 2016.
Living in the UK on the first day of your course and have lived in the UK or part of the EU
Studying with a college or training organisation in England approved for public funding.
You may also be eligible if you are an EU national.
How to Apply:
You can apply for a loan from August 2016 for courses starting between 1st September 2016 and 31st July 2017.
You will be able to apply online or download an application form. You can get further details on how to apply from us (TDLC). It is important you consider your own circumstances and look into all options for paying for your course before choosing to take out a loan. You can get independent financial advice from the Money Advice Service.
How much can I get?
The amount you can get depends on your course, the tuition fees charged by your college or training organisation and maximum amounts set by the Government.
The minimum loan amount is £300.
Course tuition fees
The tuition fee for your course will be set by your college or training organisation. They will confirm the cost before you enrol.
How’s the loan paid?
The Student Loans Company (SLC) will pay the tuition fees charged by TDLC and maximum amounts set by the organisation once they’ve confirmed your attendance on the course.
You can apply more than once
Once you have completed your course you will be eligible for more Advanced Learner Loans ( up to a total of four loans) to help you progress in your studies.
Repaying your Advanced Learner Loan is straightforward.
Your monthly repayments will be based on your income, not what you borrow
You’ll only start making repayments when your income is more than £404 per week, £1,750 per month or £21,000 per year
You’ll only pay back 9% of any income above £21,000 a year
So, if you’re paid monthly and earn £2,500 before tax you would repay 9% of the difference between what you earn and what the individual threshold is: £2,500 - £1,750 = £750
9% of £750 = £67.50
Your loan repayment would be £67 in that month. If your income drops or rises, for example if you receive a bonus, your repayment amount will automatically change to reflect this. You can make voluntary repayments at any time to pay off your loan more quickly.
If you’re self-employed you’ll be responsible for making Advanced Learner Loan repayments as part of your annual self-assessment tax return.
You can receive an Advanced Learner Loan even if you are not currently working
If you’re employed, you don’t need to do anything. Your employer will take your repayments directly off your salary as they do with tax and national insurance contributions.
If you stop working, your repayments will stop and only start again when your income is more than £21,000 a year.
You’ll be due to start repaying your loan in the April after you leave or finish your course –whichever comes first.
If you leave or finish your course before April 2016, you won’t start making repayments until after this date.
Any loan remaining 30 years after you’re due to start making repayments will not be required to be repaid.