Your plan is determined by when and where you started your course — not when you took out the loan or when you graduated.
If you are unsure, check your payslip (it shows "Plan 1", "Plan 2" etc.), log in at studentfinance.co.uk, or check the student loans section of your most recent P60 or annual SLC statement.
Each plan has its own repayment threshold, interest rate and write-off timeline. The table below is a complete reference for all five loan types.
| Plan | Who it applies to | 2026/27 threshold | Rate | Write-off | Interest |
|---|---|---|---|---|---|
| Plan 1 | Pre-Sep 2012 starters (England/Wales); Northern Ireland | £24,990/yr | 9% | 25 years | ~3.1% (lower of RPI or BoE+1%) |
| Plan 2 | Sep 2012–Jul 2023 starters (England/Wales) | £27,295/yr | 9% | 30 years | RPI to RPI+3% (income-linked) |
| Plan 4 | Scottish-domiciled students (SAAS loans) | £31,395/yr | 9% | 30 years | ~3.1% (lower of RPI or BoE+1%) |
| Plan 5 | From Aug 2023 starters (England) | £25,000/yr | 9% | 40 years | ~3.1% (RPI only) |
| Postgrad | Master's or Doctoral loan | £21,000/yr | 6% | 30 years | ~6.1% (RPI+3%) |
Thresholds updated each April. Interest rates are approximate for 2026 and revised each September. Postgraduate Loan repayments are on top of undergraduate plan repayments if you hold both.
Which plan you're on depends entirely on when you started university. Students who began an undergraduate course in England before 1 August 2023 are on Plan 2. Those who started on or after that date are on Plan 5. The plans look similar on the surface but differ significantly in repayment threshold and — crucially — how long before the debt is written off.
| Feature | Plan 2 | Plan 5 |
|---|---|---|
| Who this applies to | Started before 1 Aug 2023 | Started on/after 1 Aug 2023 |
| Repayment threshold (2026/27) | £27,295 / year (£2,274/month) | £25,000 / year (£2,083/month) |
| Repayment rate | 9% above threshold | 9% above threshold |
| Interest rate (2026) | RPI + up to 3% (income-linked) | RPI only (~3.2%) |
| Loan write-off | 30 years after April following graduation | 40 years after April following graduation |
| Repayment via employer? | Yes — PAYE deduction | Yes — PAYE deduction |
Plan 5 borrowers face the lower repayment threshold (£25,000 vs £27,295), meaning repayments kick in at a lower salary. Combined with the 40-year write-off period (vs 30 years), most Plan 5 graduates will repay significantly more over their lifetime than Plan 2 graduates at equivalent salaries.
Student loan repayments are deducted from your salary automatically alongside income tax and National Insurance — you do not need to contact the Student Loans Company or make manual payments while in UK employment. When you start a new job, you declare your loan plan on your starter checklist or P45. HMRC notifies your employer's payroll of the correct plan type, and the monthly deduction is calculated and applied each pay period. It appears on your payslip as "Student Loan" or "SL Plan 2" (or whichever plan applies).
Repayments begin from April of the year after you leave your course — even if your salary crosses the threshold mid-year, deductions start the following April. Your take-home pay is reduced by income tax, National Insurance and student loan simultaneously. Use the Take-Home Pay Calculator to see the combined effect at your salary level.
If you are self-employed, student loan repayments are declared and paid through your annual Self Assessment tax return. HMRC calculates the amount due on your profits above the threshold and payment falls on 31 January following the tax year-end, alongside income tax and Class 4 National Insurance. Check the Income Tax Calculator for an estimate of your combined deductions.
If you have both employed income (PAYE) and self-employment income, PAYE handles the deductions on your employment income and Self Assessment picks up any additional repayment due on self-employment profits — HMRC coordinates this to avoid double-deduction.
For all undergraduate plans, the formula is:
Monthly repayment = (annual salary − annual threshold) ÷ 12 × 9%
For example, a Plan 2 borrower earning £38,000: (£38,000 − £27,295) ÷ 12 × 9% = £80.29/month. For Postgraduate Loans the rate is 6%: (£38,000 − £21,000) ÷ 12 × 6% = £85/month. If you hold both plans, both deductions are made simultaneously — a Plan 2 + Postgrad borrower earning £38,000 repays approximately £165/month in total. Use the Student Loan Calculator to model your specific repayment trajectory.
Your monthly repayment is a percentage of everything you earn above your plan's threshold — the table below shows the deduction for all five plans at common salary levels. Postgraduate Loan repayments are in addition to undergraduate plan repayments if you hold both.
| Annual salary | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgrad |
|---|---|---|---|---|---|
| £25,000 | £0 | £0 | £0 | £0 | £20 |
| £28,000 | £23 | £5 | £0 | £23 | £35 |
| £30,000 | £38 | £20 | £0 | £38 | £45 |
| £35,000 | £75 | £58 | £27 | £75 | £70 |
| £40,000 | £113 | £95 | £65 | £113 | £95 |
| £50,000 | £188 | £170 | £140 | £188 | £145 |
| £60,000 | £263 | £245 | £215 | £263 | £195 |
| £80,000 | £413 | £395 | £365 | £413 | £295 |
Monthly figures rounded to nearest pound. Undergraduate plans: (salary − threshold) ÷ 12 × 9%. Postgraduate: (salary − £21,000) ÷ 12 × 6%. If you hold both an undergraduate and Postgraduate Loan, both deductions are made simultaneously via PAYE.
Plan 2 thresholds have been frozen since 2021/22, which means more graduates are drawn into repayment each year as wages rise. Plan 5 thresholds are frozen at £25,000 until at least 2027/28. Plan 1 and Plan 4 thresholds are updated annually. Use the Student Loan Calculator to project how threshold changes might affect your total repayment over the write-off period.
Interest is charged on your loan balance from the moment the first payment is made — even while you are still studying.
Plan 2 interest is income-linked:
In 2026, with RPI at approximately 3.2%, a Plan 2 graduate earning £35,000 pays around 4–5% interest on their outstanding balance.
Plan 5 interest is simpler — it is charged at RPI only, regardless of income. In 2026 this is approximately 3.2%. While lower than the Plan 2 rate for high earners, Plan 5's 40-year term means interest accrues over a longer period.
For most borrowers, early repayment does not make financial sense. If your loan is likely to be written off before full repayment (which is the case for the majority of Plan 2 graduates on average UK salaries), making overpayments reduces the write-off benefit. Before making any voluntary overpayment, use the Student Loan Repayment Calculator to model whether your loan will be fully repaid within the write-off period.
Any remaining student loan balance is cancelled — with no tax consequence — after the write-off period ends.
The write-off is also triggered if you become permanently disabled or die. There is no partial write-off for reaching a certain age — only the timeline from graduation applies.
Analysis by the Institute for Fiscal Studies suggests that under Plan 2, roughly 25–30% of borrowers will fully repay before write-off. The majority will have some balance written off. Under Plan 5, because the term is 10 years longer, more borrowers are expected to fully repay — though this is contested and depends heavily on future salary growth and threshold changes.
A UK student loan is fundamentally different from a bank loan or credit card. You cannot miss a repayment, default on it, or have it listed on your credit file. Crucially — if you never earn enough to repay it in full, any remaining balance is written off after a set number of years at no cost to you.
This is why many financial experts describe UK student loans as a graduate tax rather than a traditional debt. You pay 9% of your income above a threshold, collected automatically through payroll, for as long as you earn above that threshold. Understanding this distinction is essential before deciding whether to make voluntary overpayments.
If you are unlikely to repay your full loan balance before the write-off date, every voluntary overpayment simply reduces the amount that gets written off — you are effectively giving HMRC free money that would otherwise have disappeared. Institute for Fiscal Studies analysis suggests only 25–30% of Plan 2 graduates will repay in full before the 30-year write-off. For the remaining 70–75%, voluntary overpayments are a net loss.
Plan 5 graduates face an even longer 40-year term, meaning the majority are even less likely to fully repay — making voluntary overpayments particularly ill-advised for most Plan 5 borrowers.
Model whether your loan will be fully repaid before write-off at your current salary trajectory.
Student Loan Calculator →Priya graduated in 2022 and is on Plan 2. She starts teaching at £30,000 per year, with expected pay rises to £38,000 over her career. She has £52,000 in student loan debt.
Current repayment at £30,000: £20/month
At £35,000 (in a few years): £58/month
At £38,000 (peak career): £81/month
At these salary levels, Priya's monthly repayments are unlikely to keep pace with interest accruing on her balance. After 30 years (approximately April 2053), any remaining balance is written off.
Likely outcome: Priya makes repayments throughout her career but a significant portion of the original debt is written off. Her effective student loan "cost" is much lower than the face value.
Jake started university in September 2023, making him one of the first Plan 5 graduates. He graduates in 2026 with £60,000 of debt and starts on £32,000, growing to £65,000+ within 8 years in his tech career.
Starting repayment at £32,000 (Plan 5 threshold: £25,000): £53/month
At £50,000: £188/month
At £65,000: £301/month
Jake's higher salary means he repays substantially each month. However, with 40 years before write-off, and significant debt accruing interest, he is likely to repay more in total than Plan 2 graduates at similar salaries.
Likely outcome: Jake repays a large portion — possibly the full balance — over the 40-year term. Early career earning growth is the biggest driver of total repayment.
Claire graduated in 2018 on Plan 2 with £46,000 in debt. She earns £65,000 and has seen her salary grow consistently. Her current monthly repayment is £283/month.
At £65,000: Plan 2 repayment = (£65,000 − £27,295) ÷ 12 × 9% = £283/month
At this level of repayment (and with further salary growth), Claire is projected to fully repay her loan well before the 30-year write-off in approximately April 2049.
Likely outcome: Claire fully repays her loan, likely by her early-to-mid 40s. For high earners like Claire, the student loan functions more like a traditional debt.
See exactly what you'll repay — enter your salary, loan balance and plan type.
Student Loan Repayment Calculator →