Student loan repayments in the UK are collected through PAYE or Self Assessment — but the amount you repay depends entirely on which plan you are on and how much you earn. There are now four main student loan plans in operation, each with different repayment thresholds and write-off rules. Getting the details right matters: overpaying or underpaying can have consequences for your finances and your credit with the Student Loans Company.
The Four Student Loan Plans
Which plan you are on depends on when and where you studied:
| Plan | Who It Applies To |
|---|---|
| Plan 1 | Students who started undergraduate courses in England or Wales before September 2012, or from Northern Ireland (Scottish students are on Plan 4) |
| Plan 2 | Students who started undergraduate courses in England from September 2012 to July 2023, or in Wales from September 2012 (including after July 2023) |
| Plan 4 | Students who studied in Scotland (all years — note this replaced Plan 1 for Scottish students) |
| Plan 5 | Students who started undergraduate courses in England from August 2023 onwards |
Postgraduate loans (master’s and doctoral) from England or Wales have their own separate plan. Postgraduate loans from Scotland and Northern Ireland are repaid under Plan 4 and Plan 1 respectively.
Repayment Thresholds (2026-27)
You only repay your student loan when your income exceeds the threshold for your plan. Below the threshold, no repayments are made.
| Plan | Annual Threshold | Monthly Threshold | Weekly Threshold |
|---|---|---|---|
| Plan 1 | £26,900 | £2,241.66 | £517.30 |
| Plan 2 | £29,385 | £2,448.75 | £565.09 |
| Plan 4 | £33,795 | £2,816.25 | £649.90 |
| Plan 5 | £25,000 | £2,083.33 | £480.76 |
| Postgraduate Loan (England and Wales) | £21,000 | £1,750 | £403.84 |
Repayment is 9% of income above the threshold for Plans 1, 2, 4, and 5. For Postgraduate Loans, the rate is 6%.
Repayment Rate
Once your income exceeds the threshold, you repay 9% of the amount above the threshold (or 6% for Postgraduate Loans). This is not a flat 9% of your total income — only the excess is subject to repayment.
Example (Plan 2):
Salary: £35,000 Plan 2 threshold: £29,385 Repayment income: £35,000 − £29,385 = £5,615 Annual repayment: £5,615 × 9% = £505.35 (£42.11 per month)
Example (Plan 5):
Salary: £35,000 Plan 5 threshold: £25,000 Repayment income: £35,000 − £25,000 = £10,000 Annual repayment: £10,000 × 9% = £900 (£75 per month)
When Loans Are Written Off
Each plan has a different write-off period. If the loan is not fully repaid within this time, the remaining balance is cancelled.
| Plan | Write-Off Point |
|---|---|
| Plan 1 | 25 years after the April you were first due to repay (age 65 if your first loan was paid before 1 September 2006) |
| Plan 2 | 30 years after the April you were first due to repay |
| Plan 4 | 30 years after the April you were first due to repay (age 65 or 30 years, whichever comes first, if your first loan was paid before 1 August 2007) |
| Plan 5 | 40 years after the April you were first due to repay |
| Postgraduate Loan (England and Wales) | 30 years after the April you were first due to repay |
The write-off is the most important difference between plans when assessing the true cost. Repayments stop when the write-off date is reached, so a Plan 2 borrower who has not cleared the balance after 30 years owes nothing further. For borrowers who will not repay in full, the loan works more like a graduate contribution than a conventional debt. Plan 5 borrowers face a 40-year repayment window, meaning higher earners are more likely to repay in full.
If You Have Multiple Plans
Two undergraduate plans do not stack. If you hold more than one of Plan 1, 2, 4 or 5, you make a single 9% repayment, taken over the lowest threshold of the plans you hold — not 9% per plan. So a borrower with Plan 1 (£26,900) and Plan 2 (£29,385) repays 9% of income above £26,900 once.
Only a Postgraduate Loan is charged on top. If you have both a Plan 1 (or 2, 4 or 5) loan and a Postgraduate Loan, you repay both simultaneously:
- 9% of income above your undergraduate plan threshold
- 6% of income above the postgraduate threshold (£21,000)
Both deductions are made through PAYE. It is possible to pay up to 15% of income above the respective thresholds if you have both types of outstanding loan.
Example (Plan 2 + Postgraduate Loan):
Salary: £40,000
Plan 2 repayment: (£40,000 − £29,385) × 9% = £10,615 × 9% = £955.35 Postgraduate repayment: (£40,000 − £21,000) × 6% = £19,000 × 6% = £1,140 Total: £2,095.35 per year (£174.61 per month)
How Repayments Are Collected
For employees, repayments are deducted through PAYE by your employer, in the same way as income tax and National Insurance. Your payslip will show a student loan deduction.
For the self-employed, repayments are calculated and paid through Self Assessment. You declare your income on your tax return, and HMRC calculates the repayment due.
Student loan repayments are based on all income assessed through Self Assessment — including self-employment profits, rental income, dividends, and savings interest (if assessed via Self Assessment).
Interest Rates
Interest rates on student loans vary by plan:
- Plan 1: Whichever is lower — RPI or the Bank of England base rate plus 1%. The rate is usually reset each 1 September from the previous March’s RPI figure. GOV.UK currently shows the same 4.1% for Plans 1, 4 and 5, so RPI is the figure being charged at the moment.
- Plan 2: RPI plus 3% while studying; after you leave, RPI while earning £29,385 or less, rising on a sliding scale to RPI plus 3% at £52,885 or more — but the maximum is currently capped at 6%, so RPI+3% is never actually charged if it would exceed 6%.
- Plan 4: Same basis as Plan 1.
- Plan 5: RPI (during study and repayment — the interest rate was simplified for Plan 5).
- Postgraduate Loan: a flat RPI plus 3% for all borrowers regardless of income (unlike Plan 2, there’s no income-based taper) — also capped at 6% for 2026-27.
Interest is added even when your income is below the threshold, so a balance can grow if your repayments are smaller than the interest charged.
Voluntary Overpayments
You can make voluntary overpayments directly to the Student Loans Company at any time. However, consider carefully before doing so:
- Voluntary overpayments are not refundable.
- If you are on Plan 2 and unlikely to repay the full balance within 30 years, overpaying may not be financially advantageous — the balance will be written off regardless.
- High earners on Plan 5 (40-year write-off) are more likely to benefit from clearing the balance early.
Key Takeaways
- Plan 1 threshold: £26,900 | Plan 2: £29,385 | Plan 4: £33,795 | Plan 5: £25,000 | Postgraduate: £21,000 for 2026-27.
- Repayments are 9% of income above the threshold (6% for Postgraduate Loans).
- Write-off periods differ: 25 years (Plan 1), 30 years (Plan 2 and Plan 4), 40 years (Plan 5), with age-65 rules for some older Plan 1 and Plan 4 loans.
- On a £35,000 salary, a Plan 2 borrower repays approximately £42 per month; a Plan 5 borrower repays approximately £75 per month.
- Two or more undergraduate plans are one 9% deduction over the lowest threshold you hold. Only an undergraduate plan plus a Postgraduate Loan gives two deductions, 9% + 6%.
Use the student loan calculator to see your exact monthly and annual repayments across all plan types. For every plan’s annual, monthly and weekly threshold by tax year back to 2021/22 in one table, see our student loan repayment thresholds reference.