Living Abroad With A UK Student Loan: What You Need To Know

Your university days have come to an end and your fellow graduates are flocking to cities near and far for work. But what happens if you want to go further afield — what happens to your student loan if you move abroad?

Moving overseas is a dream come true for many graduates, as it can provide you with unique opportunities that you might not find at home.

student loan if you move abroad

What happens to your student loan if you move abroad?

Before you get too carried away with your great escape, however, there are some things you need to know about how to deal with your student loan when living abroad.


Student Loan Repayments Outside the UK

There are so many plus sides to moving overseas, but (unfortunately!) you can never ignore your student loan living abroad.

Your student loan is a contract, and the fact that you won’t be living in the UK doesn’t mean you can get away with not sticking to the terms of that contract.

As it stands, the rules state that you must repay 9% of your earnings above the local equivalent of £21,000 a year. The repayment threshold will depend on what country you want to move to and it may not be the same as it is in the UK.

You can take a look at the overseas thresholds limits per country here.

This means that even if your wage is much lower than it would be in the UK, you will likely still need to repay your student loan working abroad.

In case you’re wondering, any unpaid debts are written off after 30 years. However, there are substantial penalties if you try to shirk your repayments before that when you’re outside the UK. In fact, the Government have started to hire bailiffs overseas to get back student loan money from repayment dodgers.

Student Loan Repayments if You’re Backpacking

If you’re thinking of backpacking around the world and have no desire to get a job until your travels are over, you still can’t forget about that pesky student loan.

It’s your responsibility to contact the Student Loans Company (SLC) to defer your repayments. You will need to provide proof of no income or your means of financial support for the period you’re spending outside the country, and remember:  you will still continue to be charged interest on your loan while you’re away.

You can also make voluntary payments to your student loan at any time using a debit or credit card, cheque or postal order or an international bank transfer if you are abroad.

The Government have hinted about raising the repayment rate in the past, so there is a possibility that you could save yourself money by paying off your student loan sooner rather than later.


Managing Your Student Loan If You Move Abroad

If you’re planning on crossing the border for more than three months, it’s essential you inform the SLC and complete an overseas income assessment form before you leave the UK.

Once completed, the SLC will send you a letter to confirm any due repayments, your monthly repayment amount and information on arranging direct repayments.

It’s crucial to point out that you will incur penalties if you don’t inform the SLC about your move overseas. If you are planning a temporary move abroad for less than three months, you don’t need to notify them before you leave and you will continue to be treated as a UK taxpayer.

Each year, the SLC will send you a reassessment letter and form to your overseas address to determine your current situation and how much you need to repay.

If at any time your income falls or rises, you must contact the SLC to reassess your repayments.

Conclusion

Regardless of any rumours you may have heard about running off to foreign lands to avoid paying for your education, you still need to pay back your student loan working abroad. As long as you contact the SLC beforehand, it should be easy to manage while you’re away.


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