Student Loan Repayments
UK student loan thresholds and rates for 2026/27
Student Loan Rates 2026/27
| Plan | Annual Threshold | Who it applies to | Rate |
|---|---|---|---|
| Plan 1 | £24,990 | England/Wales pre-2012, NI all years | 9% |
| Plan 2 | £27,295 | England/Wales from Sept 2012 | 9% |
| Plan 4 (Scotland) | £31,395 | Scottish students | 9% |
| Plan 5 | £25,000 | England from August 2023 | 9% |
| Postgraduate | £21,000 | Postgraduate master's/doctoral loans | 6% |
How Student Loan Repayments Work
Student loan repayments in the UK work very differently to a traditional bank loan. You never repay a fixed monthly amount — instead, repayments are automatically deducted from your salary by your employer (via PAYE) as a percentage of your earnings above the threshold for your plan.
If your income drops below the threshold in any tax year, your repayments stop automatically. You don't need to contact anyone — it's all handled through the payroll system.
Interest accrues on your balance regardless of whether you're making repayments. The interest rate varies by plan: Plan 1 is linked to RPI or the Bank of England base rate +1% (whichever is lower). Plan 2 interest depends on your income — it can range from RPI to RPI+3%.
Which Plan Am I On?
Your student loan plan is determined by when and where you studied:
- Plan 1: You started your undergraduate course before 1 September 2012 in England or Wales, or at any time in Northern Ireland.
- Plan 2: You started your undergraduate course on or after 1 September 2012 in England or Wales.
- Plan 4: You studied in Scotland (applies to Scottish-domiciled students with income-contingent loans from SAAS).
- Plan 5: You started your undergraduate course on or after 1 August 2023 in England. Plan 5 loans have a lower threshold and a longer write-off period (40 years) than Plan 2.
- Postgraduate: You took out a Postgraduate Master's Loan or Doctoral Loan from Student Finance England or Wales.
If you're unsure of your plan, you can check by logging into your Student Loans Company account or looking at your payslip — the deduction code will show which plan applies.
Worked Example — Plan 2, £32,000 Salary
Here's how a Plan 2 repayment is calculated on a £32,000 salary:
Note that this is the repayment amount — interest still accrues on the remaining balance separately.
Repaying Multiple Loans at Once
It's possible to hold both an undergraduate and a postgraduate loan simultaneously. If your income exceeds both thresholds, repayments are collected on both at the same time.
For example, if you earn £33,000 with a Plan 2 undergraduate loan and a Postgraduate loan:
- Plan 2: 9% on £33,000 − £27,295 = 9% × £5,705 = £513.45/year
- Postgraduate: 6% on £33,000 − £21,000 = 6% × £12,000 = £720/year
- Total: £1,233.45/year (£102.79/month)
The Salary Crush calculator handles both loans simultaneously — just select your undergraduate plan and tick the postgraduate option.
When Does the Loan Get Written Off?
Any remaining student loan balance is written off after a set number of years — you never carry debt indefinitely.
- Plan 1: 25 years after the April you were first due to repay, or when you turn 65 (whichever comes first).
- Plan 2: 30 years after the April you were first due to repay.
- Plan 4: 30 years after first due, or at age 65.
- Plan 5: 40 years after the April you were first due to repay.
- Postgraduate: 30 years after first due.
For many Plan 2 graduates, the write-off date means they will never fully repay their loan — the question of whether to overpay is complex and depends on your projected future earnings.
Frequently Asked Questions
Do I repay student loans on my total salary?
No — only on the amount above your plan's threshold. If you earn £25,000 on Plan 2 (threshold £27,295), you pay nothing, even though you have a loan balance.
What happens if I work part-time or have a low income year?
Repayments are recalculated each pay period based on your actual earnings. If you earn below the threshold in a given month or week, no repayment is taken. There's no catch-up required.
Should I overpay my student loan?
This depends heavily on your plan and projected earnings. For most Plan 2 graduates on average earnings, the loan will be written off before it's fully repaid — meaning overpaying is effectively wasted money. For Plan 1 or Plan 5, the maths may differ. It's worth modelling your specific situation before overpaying.
Does student loan repayment affect my credit score?
No. Student loans in the UK don't appear on your credit report and have no impact on your credit score. They're treated as a graduate contribution, not a conventional loan.
Can I claim back overpaid student loan repayments?
Yes. If you overpay in a tax year — for example because your employer deducted too much — you can apply for a refund through the Student Loans Company. This is most common when you start a new job mid-year or have multiple jobs.
Use the full salary calculator to see your student loan repayments alongside income tax and National Insurance — with support for all plans including postgraduate loans.
Open salary calculator