Plan 2 Student Loan: 2025-26 & 2026-27
HMRC income-contingent repayments · 9% above £29,385 (2026-27)
Quick answer
£955/year on £40,000 (2026-27)
Threshold: £28,470 (2025-26) → £29,385 (2026-27) · Rate: 9%
Who this plan is for
English and Welsh students who started undergraduate courses between 1 September 2012 and 31 July 2023.
- Started an undergraduate course in England or Wales on or after 1 September 2012 but before 1 August 2023
- Took out Advanced Learner Loans (FE loans for Level 3-6 courses)
- EU students who studied in England or Wales during this window
Plan 2 repayments by salary
All figures computed live from HMRC-published thresholds. 9% of income above £29,385 (2026-27).
| Gross salary | 2025-26 annual | 2026-27 annual | 2026-27 monthly |
|---|---|---|---|
| £28,470 | £0 | £0 | £0 |
| £29,385 | £82 | £0 | £0 |
| £30,000 | £138 | £55 | £5 |
| £40,000 | £1,038 | £955 | £80 |
| £50,000 | £1,938 | £1,855 | £155 |
| £75,000 | £4,188 | £4,105 | £342 |
| £100,000 | £6,438 | £6,355 | £530 |
Interest rate
Plan 2 interest is variable: up to RPI + 3% while studying, dropping to RPI alone for those earning under the threshold, and scaling linearly up to RPI + 3% at the upper earnings band.
Current rates change each September (RPI reset). See the GOV.UK student loan repayment thresholds and interest rates page for the latest.
Writeoff
Plan 2 loans are written off 30 years after the April you were first due to repay.
Use the full calculator
Want to combine Plan 2 with another plan, test different salaries, or model a pay rise? Open the full UK Student Loan Repayment Calculator — supports all plans simultaneously and toggles between tax years.
Other student loan plans
Frequently asked questions
What is the Plan 2 threshold for 2026-27?
£29,385 per year (£2,449/month, £565/week). You only repay 9% on the portion of your gross income that exceeds this figure. The 2025-26 threshold was £28,470, and HMRC applies the new threshold from 6 April 2026.
How much do I pay on a £40,000 salary under Plan 2?
At £40,000 for 2026-27, you repay £955 per year (£80 per month). The calculation is 9% × (£40,000 − £29,385 threshold) = £955. Repayments stop automatically if your income drops below the threshold.
Who qualifies for the Plan 2?
English and Welsh students who started undergraduate courses between 1 September 2012 and 31 July 2023.
I graduated in 2020 with an English undergraduate loan. Which plan?
Plan 2. All English and Welsh undergraduate courses starting from September 2012 through July 2023 are Plan 2.
Will I ever fully repay my Plan 2 loan?
Most Plan 2 borrowers will not. The Institute for Fiscal Studies estimates only around a quarter of Plan 2 graduates fully repay before the 30-year writeoff, because of the high interest rate (up to RPI + 3%) combined with the higher threshold. Treat the 9% deduction as an extra marginal tax rather than a traditional loan balance.
Do Plan 2 overpayments make sense?
Only if you are confident you will clear the full balance within the 30 years. If your projected lifetime repayments are less than the outstanding balance, overpaying is wasted money — the unpaid portion would have been written off anyway. Run the numbers on the full calculator before putting extra cash in.
When is my Plan 2 written off?
Plan 2 loans are written off 30 years after the April you were first due to repay.