TaxHelper

Student Loan Repayments Guide

Last updated 06/05/2026

Student loan repayments in the UK are collected automatically through PAYE — your employer deducts them from your salary along with income tax and National Insurance. The amount you repay depends on which plan you are on and how much you earn above a set threshold.

Which Plan Are You On?

PlanWho it applies to
Plan 1English or Welsh students who started an undergraduate course before 1 September 2012
Plan 2English or Welsh students who started an undergraduate course on or after 1 September 2012 (up to July 2023)
Plan 4Scottish students (any start date)
Plan 5English or Welsh students who started an undergraduate course from August 2023 onwards
Postgraduate LoanPostgraduate Master's loan from 2016 onwards (England and Wales)
Scottish PostgraduatePostgraduate loan from SAAS (Scotland)

You may have loans on more than one plan simultaneously (e.g. Plan 2 undergraduate loan plus a Postgraduate Loan). Both are deducted concurrently.

Repayment Thresholds and Rates (2026/27)

PlanAnnual thresholdMonthly thresholdRepayment rate
Plan 1£24,990£2,0839%
Plan 2£27,295£2,2759%
Plan 4£31,395£2,6169%
Plan 5£25,000£2,0839%
Postgraduate Loan£21,000£1,7506%

Repayments are 9% (or 6% for the Postgraduate Loan) of your income above the threshold — not your total income. For example, on Plan 2 with a £35,000 salary:

  • Income above threshold: £35,000 − £27,295 = £7,705
  • Annual repayment: 9% × £7,705 = £693.45
  • Monthly deduction: £57.79

How Repayments Appear on Your Payslip

Your employer receives a Start Notice (SL1) from HMRC telling them which plan to use. Repayments are calculated on your gross pay each pay period and appear as a separate line on your payslip, usually labelled "Student Loan" with the plan number.

Unlike income tax, student loan repayments are calculated on each pay period independently — there is no cumulative adjustment. If you earn a large bonus in one month your repayment for that month will be higher, but it will not affect other months.

Interest

Interest accrues on your balance while you study and while you are repaying:

  • Plan 1: RPI or 1% above Bank of England base rate, whichever is lower. Currently linked to RPI.
  • Plan 2: RPI + up to 3% depending on income. Once you earn above £49,130, interest is RPI + 3%.
  • Plan 4: RPI.
  • Plan 5: RPI + 0% during study; RPI from repayment start.
  • Postgraduate Loan: RPI + 3%.

Interest does not affect your monthly repayment amount — you always pay 9% above the threshold regardless. It only affects how long it takes to clear the loan.

Write-Off Rules

If you have not repaid your loan in full by the write-off date, the remaining balance is cancelled:

PlanWritten off after
Plan 130 years from April after you first became due to repay, or age 65
Plan 230 years from April after you first became due to repay
Plan 430 years from April after you first became due to repay, or age 65
Plan 540 years from April after you first became due to repay
Postgraduate Loan30 years from April after you first became due to repay

Loans are also written off if you become permanently disabled and are unable to work, or in the event of death.

Should You Repay Early?

For most borrowers — particularly those on Plan 2 with lower or average earnings — voluntary early repayment is rarely financially advantageous. A large portion of borrowers never repay the full balance before it is written off. Making voluntary overpayments reduces a debt that may be cancelled anyway.

The calculation depends on your projected career earnings, interest rate and write-off timeline. Higher earners who expect to repay within 10–15 years may benefit from making additional payments, since they will clear the balance before the high interest accumulates further.

Checking Your Balance and Plan Type

You can view your student loan balance, repayment history and plan type at the Student Loan Repayment Service on gov.uk, or by contacting the Student Loans Company directly.

Use our salary calculator to see exactly how much will be deducted from your pay each month on any plan.