Moving Abroad With a Student Loan: What You Must Tell the SLC

Leaving the UK does not leave the loan behind. What changes is the machinery: there is no PAYE to collect it, so the responsibility moves onto you, and it comes with a legal duty to tell the Student Loans Company you have gone. Ignore that and the system does something specific and expensive, which is the part worth understanding before you fly.

The Duty to Tell Them

You must inform the SLC if you are leaving the UK for more than three months. It is a requirement of the loan regulations, not a courtesy, and it applies whether you are moving permanently, taking a contract abroad or going travelling for a year.

You do it by updating your employment details in your online repayment account, and by completing the overseas income assessment form the SLC uses to work out what you should be paying.

Thresholds Change With the Country

This is the part most people do not know. Your repayment threshold abroad is not the UK threshold. The SLC publishes a separate threshold for every country, scaled to local living costs using the World Bank's price level index, and the range is wide: countries sit across seven bands, at multipliers running from roughly a fifth of the UK threshold to around one and a half times it.

So a graduate in a low-cost country starts repaying at a much lower salary than they would at home, and a graduate in an expensive one starts later. The Plan 5 threshold for Spain in 2026/27, for example, is £20,000, against £25,000 in the UK.

The thresholds are republished each tax year, by plan and by country, and the SLC converts your local salary into sterling using a published exchange rate for the year rather than the rate on any particular day.

The Rates Do Not Change

Above the threshold you repay the same percentages as at home: 9% for Plan 1, 2, 4 and 5, and 6% for a Postgraduate Loan. What differs is that the calculation is on your gross worldwide income rather than on UK employment earnings, and it is collected by direct debit rather than by an employer.

What Happens If You Do Not Provide Income Details

This is the expensive bit, and it is not a penalty in name, which is why people underestimate it.

If the SLC does not have evidence of your income, it applies a fixed monthly repayment amount based on the band your country sits in. It is not related to what you actually earn, and it can be considerably more than your real income would produce. For a country in the band equivalent to UK living costs, the fixed monthly amounts run to hundreds of pounds: at the time of writing, £428 on Plan 1, £409 on Plan 2, £201 on Plan 4 and £442 on Plan 5.

Providing the evidence is straightforward: recent payslips, a bank statement, an employment contract or a local tax return, whatever demonstrates what you earn. The SLC reassesses annually, so it is a yearly job rather than a one-off.

If You Say Nothing at All

Arrears build. Interest continues to be charged on the whole balance throughout, and arrears are treated differently from ordinary repayments: they can be demanded in full, and persistent non-payment can be pursued through the courts in the country where you live.

There is also a practical consequence people do not anticipate. Coming back to the UK with an unresolved overseas arrears position is a slow and unpleasant thing to untangle, and it can surface at exactly the moment you are trying to arrange a mortgage.

Interest Keeps Running

Nothing about being abroad pauses interest. Plan 1, Plan 4 and Plan 5 are currently charged at 4.1%, the Postgraduate Loan at 6%, and Plan 2 on its income-based taper between 4.1% and 6%.

One quirk worth knowing about Plan 2: the higher end of the taper is normally applied by income, but a borrower the SLC cannot get income information from is charged at the top of the range regardless of what they earn. Silence is the most expensive option available on that plan.

The Write-Off Clock Keeps Running Too

Some genuine good news. Time abroad counts towards the write-off period exactly as time in the UK does. Plan 2 is written off 30 years after the April you were first due to repay, Plan 5 after 40 years, Plan 1 usually after 25, and living overseas does not extend any of them.

For a graduate who spends a decade abroad in a country with a high threshold, that can mean a meaningful stretch of the repayment period passing with little or nothing repaid, and the clock still running down.

Coming Home

Tell the SLC when you return, and check that your first UK employer has you on the right plan. Deductions restart through PAYE and the overseas direct debit should stop, but the two systems do not always hand over cleanly, and paying twice for a couple of months is a common outcome.

Check your first two or three payslips against the balance in your online account and query anything that looks doubled.

A Practical Checklist

1. Before you go: tell the SLC, update your contact details to something that will still work abroad, and note your customer reference number somewhere you will find it.
2. On arrival: complete the overseas income assessment with evidence of your income. Do not wait for a reminder.
3. Set up the direct debit from an account you will keep, and check it is coming out.
4. Every year: resubmit income evidence when the SLC asks, and check the threshold for your country has not moved.
5. Keep an eye on the balance in the online account, particularly in the first year, when errors are most likely.
6. On the way home: tell the SLC, cancel the direct debit only once PAYE deductions have started, and check the first payslips.

The Short Version

The loan follows you, the threshold changes, and the only thing that goes badly wrong is failing to send the paperwork. Twenty minutes with a payslip and an online form is the difference between repaying what you actually owe and being charged a fixed monthly amount several times larger.

Use our student loan calculator to see what your repayment would be on UK thresholds as a starting point, then check the published overseas threshold for the country you are moving to before you set up the direct debit.