Student Loan Plan 5
The newest undergraduate repayment plan, applying to students starting courses in England from 1 August 2023 onwards. Repayments are 9% of income above the Plan 5 threshold (£25,000, unchanged for 2026/27), with the loan written off after 40 years — longer than any other plan. Interest accrues at the Retail Price Index only, making Plan 5 cheaper in interest terms than Plan 2.
How it works
Plan 5 replaced Plan 2 for new English students starting courses from August 2023 onwards, following reforms to lower the repayment threshold and extend the write-off period, which shifts more of the total cost of tuition back onto graduates over their working lives. It applies only to loans taken out from that date — existing Plan 2 borrowers were not moved onto Plan 5 retroactively.
The combination of a lower threshold and a 40-year write-off means Plan 5 borrowers typically repay for far longer than those on Plan 1, Plan 2, or Plan 4, and a larger proportion are expected to clear their loan in full rather than have a balance written off. Because interest accrues at the Retail Price Index only, with no additional percentage on top, the balance still grows more slowly in interest terms than a comparable Plan 2 loan.
If you started your course before August 2023 you remain on your original plan even if you're still studying after that date — Plan 5 only applies based on your course start date, not the date repayments actually begin.
Example: Plan 5 repayment on a £30,000 salary
The Plan 5 threshold is £25,000. On a £30,000 salary, £5,000 sits above the threshold, so the repayment is £5,000 × 9% = £450 for the year, or £37.50 a month.
Because the Plan 5 threshold is lower than Plan 1, Plan 2, or Plan 4, a graduate on the same £30,000 salary would pay nothing at all on Plan 4 (below its £33,795 threshold) but £450 a year on Plan 5 — the lower threshold catches more of a graduate's early-career income.
Frequently asked questions
Why does Plan 5 have a 40-year write-off instead of 30?
The longer write-off period was introduced alongside the lower repayment threshold as part of the same reform, which together mean more graduates repay closer to the full amount borrowed rather than having a balance cancelled.
Is Plan 5 more or less expensive overall than Plan 2?
It depends on your career earnings — Plan 5's lower threshold and longer term mean higher earners often repay more in total, while its RPI-only interest rate, versus Plan 2's RPI plus up to 3%, can mean slower balance growth for lower earners.
If I started my course in 2022 but I'm still studying in 2026, am I on Plan 5?
No — your plan is fixed by your course start date, so a course that began before August 2023 keeps you on Plan 2, or whichever plan applied then, for the life of that loan.
Related Terms
Student Loan Plan 1
The earliest student loan repayment plan, applicable to UK students who took out their first loan before 1 September 2012.
Student Loan Plan 2
The repayment plan for students who started an undergraduate course in England or Wales from 1 September 2012 onwards.
Student Loan Plan 4
The repayment plan for Scottish students who took out their first student loan on or after 1 September 1998 under the Student Awards Agency for Scotland.
Postgraduate Loan
A student loan available to UK residents studying a postgraduate master's or doctoral course, repaid through payroll deductions at 6% of income above the postgraduate repayment threshold (£21,000 per year).
Repayment Threshold
The level of annual income above which you must start making student loan repayments, which differs depending on your loan plan.
SLC
The Student Loans Company — the government-owned company that administers student loans in the UK, including issuing funds to students, collecting repayments through payroll (via HMRC), and managing loan balances.
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