Starting out on post university life with a considerable amount of student debt can be a daunting prospect. There may be a lucky few who were able to take the loan available and squirrel some of it away into a high interest account - thus trying to make more money in deposit interest that the loan rates charged to the balance.

Student loans taken out before September 1998 will have to be repaid in either 60 or 84 monthly instalments, depending upon how many loans you have. Either way, you will have started to repay them in the April after the year in which you graduated.

Student loans taken out after September 1998 are repayable on a different basis. The obligation to make repayments start in the April following the year you graduate or left your course. However, you only start to make repayments if you are in employment and are earning more than £15,000 per year, £1,250 per month or £288 per week. If your income exceeds these amounts, your employer will automatically deduct 9% of the excess through the PAYE system.

The rate charged on all loans changes annually on the 1st September each year and is based on the rate of inflation as measured by the Retail Prices Index (RPI). For the year 1st September 2008 to 31st August 2009, the rate is 3.8% charged on the balance of the loan outstanding. Your annual statement will confirm what this is.

If you never work or earn less than £15,000, then loans taken out after September 1998 will not need to be repaid. At age 65, or 25 years after the loan was first granted, the balance is written off. In most cases, however, there will be the obligation to repay and the system introduced after 1998 is far more forgiving than that before.

The rate of interest charged is quite low in commercial terms. There may be some lags between annual rate settings and market rates but by charging RPI, the real amount to repay should approximate the original value of the loan in today's terms.

Notwithstanding this, there are options available to repay the loan should you choose to do so. This can be done by either sending a cheque for any amount to the loans company managing your account, making a payment by debit or credit card, postal order or bank giro credit. Additionally, you can contact them with a request to increase the amount of either monthly payment or employer collected deduction. In each case, your annual statement will record the additional payments made. Interest is only charged on the capital balance of the loan on a daily basis so you will receive full benefit for any early payment made.

It is possible that you may make payments to your account through the year even though your full year earnings do not exceed £15,000. If this is the case, and you wish to reclaim this amount, you must contact the Student Loan Company and arrange for a rebate. If you do not, your loan balance will reflect the additional payments made. Refunds will only be made at the end of the Tax Year (April).