Catshanghai

British graduates who live abroad may find themselves having to pay back their student loans at a quicker rate than if they chose to remain in the UK.

Anyone who has taken out a student loan since 1998 has to pay back a monthly amount that is calculated by a means tested formula. You pay back 9 percent of anything you earn above 15 000 GBP until the loan is repaid.

Let’s say you earn 25 000 GBP a year. You would pay back 900 GBP a year or 75 GBP a month.

This is not true for ex students who have left the UK to work abroad. The Student Loans Company (SLC) has calculated different thresholds for every country. China is set at a very low amount. The SLC wants British graduates to pay back 9 percent of everything they earn over 3000 GBP a year. A teacher earning 25 000 GBP a year in China would be expected to pay 1980 GBP a year or 165 GBP every month.

The argument for this is that expats can afford to payback their student loans sooner in countries where the cost of living is much lower than the UK. That may be true, but it is ludicrous to suggest that China is five times cheaper than Britain.

A bowl of noodles or a taxi may be much cheaper in China, but foreigners in China are burdened with other costs such as medical care, pension provision and returning home every now and again. Does an expat on 20 000 GBP have the purchasing power of a British resident on 100K a year? This is an arbitrary figure that bears little relationship to the cost of living in Shanghai.

I am sure there are tens of thousands of students who default on their student loan repayments when they leave the UK. Asking them to pay it back sooner is not going to make it any easier for the SLC to collect payments given it is very unlikely they are ever going to send baillifs out to Shanghai.

I have just written to the SLC telling them I am only willing to payback 75 GBP a month. I am still committed to clearing my student loan, but not as quickly as they would like. If the SLC does not like my offer then that is too bad.