Under the Scottish Government's new plan for student loans, thousands of Scots will benefit from a reduction in their repayments of around £42 per month.

This change is for Scottish students who applied for loans from the Student Awards Agency Scotland (SAAS) during their studies.

Here's what you need to know:

From April 6, people on Scottish Student Loans (SSL) repayment Plan 1 will be moved on to Plan 4.

This will see their monthly earnings threshold increase from £1,615 to £2,063, before tax.

This means you will only need to repay a student loan if you are earning over that amount, the equivalent to a £25,000 salary.

Deductions over the new threshold will be calculated at nine per cent.

The new plan and increased threshold will see affected borrowers save around £42 every month.

Student and postgraduate loans thresholds and rates

From April 6, 2021:

Plan 1 – £19,895 - earnings above this threshold will continue to be calculated at 9%

Plan 2 – £27,295 - earnings above this threshold will continue to be calculated at 9%

Plan 4 – New plan - Scottish Student Loans (SSL) £25,000, earnings above this threshold will be calculated at 9%

Postgraduate loan (PGL) – £21,000 - earnings above this threshold will continue to be calculated at 6%

Examples:

How will I find out?

The Student Loans Company (SLC) said: "We’ll make these changes automatically, so there’s nothing you need to do. Nothing else is changing, including how much interest you’re charged or how and when you repay."

You can find up-to-date information about your loan by signing in to your repayment account on the GOV.UK website here.

If you have never signed in to your repayment account, you will need to call the Student Loans Company on 0300 100 0611 to set the account up for you.

How will the change impact employers?

These changes will not only impact employers in Scotland, but also across the UK.

This will apply to employers who have employees paying back their loan from SAAS, however, there will be no action required for Plan 1 borrowers who did not get their loan from SAAS.

The introduction of Scottish student loans will result in SL1s being issued to employers for existing borrowers impacted by the change and will be in addition to the usual bulk issue of SL1s at the start of each tax year.

Employers should apply this change to their payroll software and action on their first FPS submission after April 6, 2021.

If an employee is not moved to Plan 4, they will over repay their student loan.

The starter checklist has also been updated to reflect this new plan type and will be available on GOV.UK before the start of the new tax year.

What if you are repaying student loans from overseas?

Your repayment threshold will vary depending on which country you live and work in.

SLC will send you a revised overseas repayment schedule - so make sure your details are up to date.

You can update your contact details by signing in to your repayment account.