How the SLC overseas threshold works
When you move outside the United Kingdom for three months or more, you stop being assessed for student loan repayments through PAYE and instead enter the Overseas Income Assessment (OIA) process. Each year, SLC sends you (or you download from your repayment account) an OIA form. You declare your gross overseas income for the past tax year, SLC applies the country-specific threshold for your band, and SLC calculates the annual repayment. Payment is usually made by direct debit in 12 equal monthly instalments in your local currency.
The overseas system exists for one simple reason: the cost of living varies enormously between countries. A graduate earning £25,000 in London is in a very different financial position to a graduate earning the equivalent of £25,000 in Mumbai. Without country-banded thresholds, expatriate borrowers would face disproportionately heavy repayment burdens compared to UK-based graduates earning the same nominal income.
Country tiers explained
GOV.UK does not document the methodology behind its country groupings, but cross-checking the published 2026-27 tables for every plan shows each country sits in a fixed tier, expressed as a multiple of that plan's own UK domestic threshold:
- 1.2x the UK threshold: United States, Switzerland. Graduates here can earn more than a UK-based graduate before repayments start.
- 1.0x the UK threshold (parity): Australia, Canada, New Zealand, Ireland, Netherlands. Same threshold as if you were earning in the UK.
- 0.8x the UK threshold: Germany, France, Spain, Italy, United Arab Emirates, Hong Kong, Japan.
- 0.6x the UK threshold: Singapore, Portugal.
- 0.4x the UK threshold: South Africa.
- 0.2x the UK threshold: India, Pakistan, Nigeria.
These tiers apply to every plan (1, 2, 4, 5 and Postgraduate) consistently, but the pound figure they multiply is different for each plan, so the same country produces a different threshold depending on which plan you are on. Only Plan 2 publishes an additional upper earnings threshold, used to band the sliding interest rate that applies to Plan 2 balances. GOV.UK republishes all five tables every April; always check your plan's current table rather than relying on last year's figure.
How to notify SLC you are abroad
- Log in to your online repayment account at studentloanrepayment.co.uk at least one month before you leave.
- Complete the Overseas Income Form (OIA) and upload supporting documents: payslips, contract of employment, or tax return from your new country.
- Provide a stable correspondence address (a UK address held by family is acceptable), a permanent email, and an international phone number.
- Set up a direct debit in your local currency. SLC accepts SEPA, ACH, BPAY (Australia), and a growing list of fintech rails.
- Re-confirm your income every tax year (April for UK, but SLC accepts local tax years where appropriate).
What happens if you do not notify SLC
Failing to update SLC when you move abroad is one of the most expensive mistakes a UK graduate can make. SLC applies the Fixed Repayment Schedule (FRS), which assumes you are earning at a high level and bills you a flat monthly amount set by your plan type rather than by what you actually earn. SLC does not publish the FRS amounts on GOV.UK, so check your online repayment account or ask SLC directly for the figure that applies to you. FRS also carries interest at the maximum rate for your plan. Arrears compound quickly, debt collectors are instructed within 90 days, and your credit file in the UK can be marked even if you no longer live there. Most importantly, all FRS repayments are taken at the punitive rate until you complete a full OIA, even retrospectively.
Worked example: graduate in Australia on A$95,000
Emma graduated in 2018 on Plan 2 and moved to Sydney in 2022 to work as a software engineer. She earns A$95,000 per year. Australia sits in the 1x tier, the same as the UK domestic threshold. Every figure below is computed from the same data the calculator uses, so it cannot go stale when GOV.UK republishes the tables.
- UK Plan 2 threshold 2026/27: £29,385
- Local threshold (1x tier, GBP/AUD 0.489572): about A$60,022
- Excess income: A$95,000 − A$60,022 = A$34,978
- Annual repayment: A$34,978 × 9% = A$3,148
- Monthly repayment: about A$262
Emma sets up a monthly BPAY direct debit. Because Australia is in the parity tier, her repayment burden is essentially identical to a UK-based Plan 2 graduate on the same nominal salary.
Worked example: graduate in Germany on €55,000
James is on Plan 2 and works in Berlin as a designer earning €55,000 per year. Germany sits in the 0.8x tier.
- UK Plan 2 threshold 2026/27: £29,385
- 0.8x tier: £29,385 × 0.8 = £23,508
- Local threshold (EUR, GBP/EUR 0.853461): about €27,547
- Excess income: €55,000 − €27,547 = €27,453
- Annual repayment: €27,453 × 9% = €2,471
- Monthly repayment: about €206
Because Germany sits in the 0.8x tier, James starts repaying at a lower local income than he would in Sydney, but his cost-of-living (rent, transport, healthcare) is also typically lower, which is what the tier system is designed to reflect.
Frequently asked questions
Do I still repay my UK student loan if I move abroad permanently?
Yes. Your liability to repay the loan is unaffected by your residence. You must continue to repay through the Overseas Income Assessment process until the loan is repaid in full or until the standard write-off date for your plan (25, 30 or 40 years depending on plan, counted from the April after the course ends)[source].
How often does GOV.UK update the country thresholds?
Annually, in line with the UK tax year (6 April). GOV.UK republishes all five per-plan tables each spring, updating the exchange rate for every country even when the GBP tier itself does not change. Some years also bring tier changes: several EU countries were moved to a lower Plan 2 tier for 2026-27.
Does my country's tier change my interest rate?
Not directly. Interest accrues at the same rate whether you are in the UK or abroad. What your country's tier changes is the threshold above which repayments are calculated. Though for Plan 2 specifically, your income relative to the published upper threshold does affect where you sit on the sliding interest-rate scale.
Can I pay in GBP from overseas to avoid currency conversion?
Yes. SLC accepts GBP repayments from any UK bank account or via international transfer. Many overseas graduates keep a UK high-street account specifically for this purpose to lock in predictable monthly amounts.
What counts as "income" for overseas assessment?
Gross worldwide income before tax — including salary, bonuses, self-employment, rental income, and investment income. SLC mirrors HMRC's definition of taxable income, with reasonable deductions for foreign tax already paid where double-taxation agreements apply.
What happens if I stop earning while abroad?
Submit a nil-return OIA. If your income falls below your country's threshold for your plan, no repayments are due that year, but you must still complete the form. Failing to complete it triggers the Fixed Repayment Schedule.
Are Postgraduate loans treated differently for overseas repayments?
The mechanism is identical, but the UK domestic threshold is lower (£21,000, before the same country tier is applied) and the repayment rate is 6% rather than 9%. If you also have an undergraduate plan, the two loans stack: you repay 9% on income above your undergraduate plan's country threshold and 6% on income above the Postgraduate loan's country threshold, which is a different figure.
What if my country is not listed here?
This calculator covers the destinations most UK graduates ask about, not the full GOV.UK table, which lists well over 100 countries. If your country is not in the dropdown, check your plan's current "Overseas earnings thresholds" publication on GOV.UK directly, or your Overseas Income Assessment form, for the exact figure.