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; Northern Ireland students (any start date) |
| Plan 2 | Started on or after 1 September 2012 in Wales; in England from 1 September 2012 to 31 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 2026-27
| Plan | Annual Threshold | Rate | Write-off |
|---|---|---|---|
| Plan 1 | £26,900 | 9% above threshold | 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 | £29,385 | 9% above threshold | 30 years after the April you were first due to repay |
| Plan 4 | £33,795 | 9% above threshold | 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 | £25,000 | 9% above threshold | 40 years after the April you were first due to repay |
| 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 − £29,385 = £5,615 above threshold
- 9% × £5,615 = £505/year (£42/month)
They never pay more than this regardless of their total loan balance.
Interest Rates
Interest treatment varies by plan:
- Plan 1 & 4: the lower of RPI and the Bank of England base rate plus 1% (GOV.UK currently shows 4.1%).
- Plan 2: RPI + 3% while studying; after you leave, RPI only if you earn £29,385 or less, rising on a sliding scale to RPI + 3% at £52,885 or more — but the maximum is currently capped at 6%, so with RPI at 4.1% the top rate is 6%, not 7.1%.
- Plan 5: RPI only throughout.
- PGL: a flat RPI + 3% for all borrowers regardless of income (no threshold-based taper like Plan 2) — also capped at a maximum of 6% for 2026-27.
Will You Pay It All Off?
Whether you repay in full depends on your earnings and your balance. GOV.UK warns that you might not benefit from extra repayments because your loan will be written off at the end of the loan term, and extra repayments cannot be refunded. Treat overpayments 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
If you hold more than one of Plan 1, 2, 4 and 5, you make a single 9% repayment over the lowest of their thresholds, not one repayment per plan.
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.