Details

This guide applies to Plan 2 customers. You’re a Plan 2 customer if you got funding from:

• Student Finance England between 1 September 2012 and 31 July 2023
• Student Finance Wales on or after 1 September 2012

You can also find out the overseas repayment thresholds for Plan 1, Plan 4 and Postgraduate Loan repayments. Check out which repayment plan you’re on.

How the overseas repayment thresholds are set each year

Overseas thresholds are based on living costs in each individual country. This is why the repayment threshold is not always the same as it is for those in the UK.

The Price Level Index (PLI) is used to measure the differences in the general price levels for each country, for example, the costs of food, housing, and transport, to allow a comparable threshold to be set.

The repayment thresholds for each country are set once a year on 6 April.  Changes to this can affect how much you need to repay even if your income has remained the same.

The PLI information is taken from the most recent year published by the World Bank.

How we work out the exchange rate used each year

The exchange rate we use to convert your salary to GBP is based on the average currency exchange rates for the most recent calendar year published by HMRC.

These are reviewed every year on 6 April. They won’t show any month-to-month rate changes.

How we calculate your gross annual salary using your payslips

If you’re paid monthly, we’ll use your income from your last three months’ payslips to calculate your average monthly salary. Then we multiply this by 12 months to total your gross annual salary.

Example: 

Month 1 income	£2,500
Month 2 income	£3,000
Month 3 income	£2,750

£2,500 + £3,000 + £2,750 = £8,250

£8,250 / 3 = £2,750 average monthly salary

£2,750 x 12 months = £33,000 gross annual salary

If you’re paid weekly, we’ll use the average income from your last 12 weeks’ payslips and multiply this by 52 weeks to work out your gross annual salary.

If you’re paid bi-weekly or fortnightly, we’ll use the average income from your last 6 weeks’ payslips and multiply this by 24 weeks (for bi-weekly pay) or 26 weeks (for fortnightly pay) to work out your gross annual salary.

Bonuses and overtime

Any bonuses, overtime, commission and allowances that are:

• one off payments will be added to your annual income after it’s been calculated
• regularly received will be included in the calculation of your annual income.

Superannuation

Superannuation payments won’t be included when we work out your monthly repayment amount.

If you’re paid more than 12 times a year

In some countries employees are paid more than 12 times a year. 

Where this happens, we’ll use the income from your last three months’ payslips to work out your average monthly salary.  This will then be multiplied by the number of pay periods in a full year to calculate your gross annual salary.  

How we calculate your repayment schedule

We use the “overseas repayment threshold for Plan 2” table to calculate your repayment amount, by using the following steps:

1. We’ll convert your gross annual salary to GBP by using the exchange rate for the country you’re living in.
2. Then we’ll take away the “repayment threshold (GBP)” for that country from your annual salary.
3. You’ll repay 9% of the amount left over. This is split over 12 months to give you your monthly repayment amount.

For example:

You’re on Plan 2, living in Spain and have an income of €33,000 a year.

Your salary is converted to GBP using the exchange rate for Spain which is 0.869943:0.848248:

€33,000 x 0.8699430.848248= = £28,708.11.£27,992.18.

The repayment threshold for Spain is £21,840.£22,780.

This is taken away from your annual earnings:

£28,708.11£27,992.18 - £21,840£22,780 = £6,868.11£5,212.18

You repay 9% of this figure (£6,868.11(£5,212.18 x 0.09) which is £618.12.£469.09.

This is divided into 12 monthly payments of £51.51£39.09 (rounded down to £51).£39).

Keep your employment details up to date if you’re going overseas

If you’re overseas for more than three months, you need to give us information on how you’re supporting yourself financially. You can update your employment details online, even to let us know that you’re unemployed. The online service will tell you exactly what information we need from you.

This allows us to determine if you’re due to start making repayments. If you are due to start repaying, we’ll give you an accurate repayment plan based on your earnings or defer your repayments for 12 months if you’re earning under the threshold. 

If you don’t update us, then the fixed monthly repayment shown for the country you’re living in will be expected every month and you may be charged the highest rate of interest on your loan balance.

If repayments aren’t made then an overdue balance will build up on your account.

We use the lower earnings threshold to work out how much you’ll repay. We normally use the lower earnings threshold and the upper earnings threshold to work out how much interest to apply to your balance (RPI plus up to 3%).  However, due to the interest rate cap being lower than RPI, this is not being used currently.3%).