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If you are a student in Wales who studied at university in the year 2010/11 or 2011/12 then you will be happy to hear that you may be able to take £1,500 off of your loan repayments.
It is part of a new initiative that means if your first payment to the student loans company is over £50 they will deduct a total of £1,500 from your loan amount. If you pay back under £50 with your first repayment then you will have an amount lower than £1,500 deducted (dependent on a number of factors).
The discount applies to a maintenance loan taken out from Student Finance Wales in the years stated above and can only be deducted with the first repayment of your loan.
Here at Save the Student! we would advise you to try your best to make sure that your first loan payment is £50 or above, whether you are in work or not. Overall, the deduction will not only save you the initial cost but also the interest that may be added.
Are you eligible for the maintenance loan discount?
Below is a list of the criteria that you need to pass in order to be eligible for the maximum discount:
- Welsh student
- Received all installments of the maintenance loan in the academic years 2010/11 or 2011/12
- Makes the first loan payment of £50 or above (can be less for smaller discount)
How do you make the first payment?
The first payment can be through your employer or through yourself. Your employer will make the payment for you at 9% of your earnings (although you could ask them to increase it to £50 for the first payment).
If you are currently unemployed or still in university then you may want to make the payment yourself. This can be done online on the Student Finance Wales website or over the phone.
All in all, you can pay by credit or debit card, direct debit, standing order, through the tax system, i.e. PAYE or Self-Assessment or cheque.
The minimum payment is £5.
How much of your Loan will be cancelled?
According to the Welsh Student Loans Company, the calculation to work out the amount of your Maintenance Loan that is cancelled is complex and depends on:
- the value of your first repayment;
- the amount of Maintenance Loan you took out in academic year 2010/11 or 2011/12; and
- your total outstanding balance at the time you make your first repayment.
You can check on the Welsh Student Loans website here in order to get a better idea of how your individual case would be handled.