The UK’s student loan system is nothing like a standard bank loan. Repayments are income-contingent — you only pay when you earn above a threshold — and most loans are written off after a set number of years regardless of the outstanding balance. The key is knowing which plan you are on.
Which Plan Are You On?
| Plan | Who It Applies To |
|---|---|
| Plan 1 | Started before 1 September 2012 in England/Wales; most Northern Ireland students |
| Plan 2 | Started on or after 1 September 2012 in England/Wales (until July 2023) |
| Plan 4 | Scottish students (all intakes) |
| Plan 5 | Started from August 2023 in England |
| Postgraduate (PGL) | Postgraduate Master’s or Doctoral loans (England/Wales) |
If you studied in multiple countries or took out multiple loans, you may be on more than one plan simultaneously.
Repayment Thresholds and Rates 2025/26
| Plan | Annual Threshold | Rate | Write-off |
|---|---|---|---|
| Plan 1 | £24,990 | 9% above threshold | Age 65 (or 25 years) |
| Plan 2 | £27,295 | 9% above threshold | 30 years after April of first repayment year |
| Plan 4 | £31,395 | 9% above threshold | Age 65 (or 30 years) |
| Plan 5 | £25,000 | 9% above threshold | 40 years after April of first repayment year |
| Postgraduate | £21,000 | 6% above threshold | 30 years |
How Repayments Are Calculated
Repayments are always 9% (or 6% for PGL) of income above the threshold — never of total income.
A Plan 2 borrower earning £35,000 pays:
- £35,000 − £27,295 = £7,705 above threshold
- 9% × £7,705 = £693/year (£57.75/month)
They never pay more than this regardless of their total loan balance.
Interest Rates
Interest treatment varies by plan:
- Plan 1 & 4: RPI only, so the balance rarely grows in real terms.
- Plan 2: RPI + up to 3% while studying; RPI only once income is below the threshold.
- Plan 5: RPI only throughout.
- PGL: RPI + 3% throughout.
Will You Pay It All Off?
Most Plan 2 and Plan 5 borrowers — especially those in lower or middle-income careers — are unlikely to repay their full loan before write-off. The decision to make overpayments should be treated as a financial calculation, not an emotional one: if the loan will be written off anyway, overpaying is simply lost money.
Plans Running Concurrently
If you have both a Plan 2 undergraduate and a Postgraduate loan, you repay both simultaneously:
- 9% on income above the Plan 2 threshold
- 6% on income above the Postgraduate threshold
These are deducted separately on your payslip.
Key Takeaway
Your student loan plan is determined by when and where you studied, not by the size of your debt. Use our student loan calculator to see exactly how much you are repaying each month and how it affects your take-home pay.