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HMRC internal manual

Collection of Student Loans Manual

Compliance: borrower compliance: introduction

HMRC are responsible for collecting income-contingent student loan repayments on behalf of the Department for Business Innovation and Skills (BIS) under the Education (Student Loans) (Repayment) Regulations 2009.

Income-contingent repayment loans were introduced in 1998 and replaced the earlier system of fixed-term repayment loans which were repaid directly to the students Loans Company. The first income-contingent repayments began in 2000-01 but old style loans will continue to be repaid for a number of years - see CSLM2010 for more information about the different types of student loans.  These loans are known as Plan 1 loans

A new type of repayment loan was introduced in 2013. These loans are known as Plan 2 loans.  Plan 2 loans operate in the same way as Plan 1 loans although the amount that can be borrowed is higher and the threshold at which repayment starts is also a higher threshold.

UK resident borrowers of income-contingent repayment loans mainly repay through

  • Deduction from earnings together with tax and NICs under Part IV of the regulations


  • Self Assessment under Part III of the regulations

Borrowers are liable to make repayments for each pay period or year of assessment. The amount to be repaid depends on their income for the period.

They can, in addition, make repayments directly to the Student Loans Company at any time and in the final two years of repayment they can agree with the Students Loans Company to pay by direct debit instead.

Non-UK resident borrowers make Student Loan repayments directly to the Student Loans Company under Part V of the regulations. HMRC has no responsibility for these borrowers. A borrower must notify the Student Loans Company if they are resident outside the UK for a period exceeding 3 months.

The business area ‘SL repayments’ at CSLM16000 onwards - explains the general rules which apply to all borrowers. These rules include

  • What earnings are liable to student loan deductions
  • The income threshold above which student loan repayments are due
  • The amount of student loan repayments due for each period

This section of the Manual covers local office enquiry work concerning borrowers.