Guide · Published July 2026
What Happens to Your Student Loan When You Move Abroad?
Written by Zubair Arshed FIA, Chartered Actuary
Fellow of the Institute and Faculty of Actuaries
Actuarial Post Life and Health Actuary of the Year 2024
Moving abroad with a student loan does not pause it, cancel it, or put it out of the Student Loans Company’s reach. Your loan follows you, but the mechanics change: PAYE deductions stop, you become responsible for reporting your income, and your repayment threshold switches to a country-specific figure. Get the paperwork wrong and you can end up paying a fixed default charge that is many times what you actually owe.
Do I have to tell the Student Loans Company I am moving abroad?
Yes. If you leave the UK for more than three months you must tell the SLC and complete an overseas income assessment. You provide evidence of your income (payslips or a contract), and the SLC sets a monthly repayment in the local currency based on your earnings above the overseas threshold for your country.
The repayment percentage does not change. It is still 9% of income above the threshold (6% for Postgraduate loans). What changes is the threshold itself and the fact that nothing is collected automatically: you pay the SLC directly, and the assessment is refreshed roughly once a year.
How are overseas repayment thresholds set?
The government assigns each country to a price-level band, so the threshold is lower in cheaper countries and higher in more expensive ones. A few examples for 2025-26:
| Countries (examples) | Band | Plan 2 threshold | Plan 5 threshold |
|---|---|---|---|
| Australia, United States, Switzerland | £30,000 | £35,262 | £30,000 |
| Germany, Ireland, Canada, New Zealand | £25,000 | £29,385 | £25,000 |
| France, Spain, Japan, UAE, Singapore | £20,000 | £23,508 | £20,000 |
| Portugal, Poland, Greece, Brazil | £15,000 | £17,631 | £15,000 |
Notice the direction this cuts. In Australia or the US your Plan 2 threshold is £35,262, nearly £6,000 higher than in the UK, so the same salary produces a smaller repayment. In Portugal it is £17,631, so a UK-level salary produces a much larger one. Thresholds for Plan 1, Plan 4 and Postgraduate loans scale the same way from each country’s band.
What happens if I do not report my income?
The SLC applies a fixed monthly default charge based only on your country’s band, not your actual earnings. For a Plan 2 borrower the default is £386 a month in a £25,000-band country and £463.20 a month in a £30,000-band country. The default assumes you are a high earner, and for most people it is far more than the income-based amount.
Worked example: Plan 2 borrower in Australia
Salary equivalent to £40,000. Reporting your income gives a repayment of 9% × (£40,000 − £35,262) = £426 a year. Not reporting triggers the £30,000-band default of £463.20 a month, which is £5,558 a year. Reporting saves this borrower roughly £5,130 every year, or about 13 times the assessed amount.
Occasionally the default is the cheaper option, typically for very high earners in low-band countries. It is worth checking both numbers before deciding, though deliberately withholding income information has compliance implications, and unpaid amounts become arrears that the SLC can pursue.
Does my write-off clock keep running while I am abroad?
Yes. The write-off date is fixed by your plan and your repayment start date, and it does not care where you live. A Plan 2 loan is still cancelled 30 years after your first April, whether you spent those years in Manchester or Melbourne. Interest also continues to accrue on the same formula as at home.
This means the logic from our overpayment guide applies overseas too. If you were on course for write-off before you left, moving abroad rarely changes that, and the sensible strategy is usually to report your income, pay the assessed amount, and let the clock run.
What if I move back to the UK?
Tell the SLC you have returned and PAYE deductions resume automatically once you are employed, using the normal UK threshold for your plan. Any arrears built up overseas remain owed. The premium emigration tool in our calculator models the full journey, including a return to the UK partway through your term, with currency conversion and the report-or-default comparison for over 50 countries.
Model your loan in your destination country
Enter your destination and overseas salary to see your exact repayment, whether reporting beats the default charge, and your full projection to write-off.
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