How do UK student loan repayments work?

You repay 9% of income above the threshold. Plan 2 threshold is £29,385/year (2026/27). Earning £35,000, you'd repay about £42/month. Repayments are taken automatically from your pay.

When do UK student loans get written off?

Plan 1 loans are written off at age 65. Plan 2 loans are written off 30 years after graduation (or 40 years for Plan 5). Most graduates won't repay in full.

UK Student Loans Explained: Plan 1, 2, 5 and How to Repay

UK student loans are repaid at 9% of income above threshold — you only pay when you can afford to. Here’s everything you need to know.

Student Loan Plans

Plan	When Started	Threshold	Write-Off
Plan 1	Before Sept 2012	£26,900	Age 65
Plan 2	Sept 2012 onwards	£29,385	30 years
Plan 4	Scotland	£33,795	30 years
Plan 5	Sept 2023 onwards	£25,000	40 years
Postgraduate	Masters/PhD loan	£21,000	30 years

Repayment Thresholds 2026/27

Plan	Weekly	Monthly	Annual
Plan 1	£517	£2,241	£26,900
Plan 2	£565	£2,448	£29,385
Plan 4	£649	£2,816	£33,795
Plan 5	£480	£2,083	£25,000
Postgraduate	£403	£1,750	£21,000

How Much You’ll Repay

Plan 2 Monthly Repayments

Salary	Monthly Repayment
£25,000	£0
£30,000	£5
£35,000	£42
£40,000	£80
£50,000	£155
£60,000	£230
£75,000	£342

Formula: (Salary - Threshold) × 9% ÷ 12

Plan 1 Monthly Repayments

Salary	Monthly Repayment
£25,000	£0
£30,000	£23
£35,000	£61
£40,000	£98
£50,000	£173

Interest Rates

Plan 2 Interest

Income	Interest Rate
£29,385 or less	RPI (4.1% as of October 2026)
£29,386 - £52,884	RPI + up to 3% (4.1% to 6% as of October 2026)
£52,885 or more	RPI + 3%, currently capped at 6%
While studying	RPI + 3%, currently capped at 6%

Interest starts accruing from day one of university. Rates are usually reset each 1 September.

Plan 1 and Plan 5 Interest

Plan	Interest Rate
Plan 1	Lower of RPI or Bank of England base rate + 1% (4.1% as of October 2026)
Plan 5	RPI (4.1% as of October 2026)

Plan 5 has lower interest than Plan 2.

Average Student Debt

Degree Type	Average Debt
3-year degree	£44,000
4-year degree	£58,000
Medical degree	£80,000+
With maintenance loan	Higher

The Department for Education forecasts that 55% of full-time undergraduates starting in 2025/26 (Plan 5) will repay their loan in full.

Will You Repay in Full?

Whether you repay in full depends on your lifetime earnings: Plan 2 balances are written off after 30 years and Plan 5 balances after 40. DfE expects borrowers in the top three deciles of lifetime earners to repay in full.

Who Should Consider Overpaying

Situation	Overpay?
Will definitely clear loan	Consider it
High earner (£60K+)	Maybe
Low/middle earner	Probably not
Might not repay in 30 years	No

Rule: If you won’t clear loan naturally, don’t overpay — it’s written off anyway.

How Repayments Work

Employed (PAYE)

What Happens	Details
Deducted from pay	Automatic
Shown on payslip	Student loan deduction
Starts	First job above threshold
Employer knows	Plan type from tax code

Self-Employed

What Happens	Details
Through Self Assessment	Annual payment
Due date	31 January
Calculate	Based on profits

Loan Write-Off

Plan	Write-Off Date
Plan 1	Age 65 (or earlier dates for old loans)
Plan 2	30 years after first April you were due to repay
Plan 4	30 years after first April you were due to repay
Plan 5	40 years after first April you were due to repay
Postgraduate	30 years

Write-off is tax-free — no income tax on forgiven amount.

Postgraduate Loans

Feature	Details
Amount	Up to £12,471
Repayment	6% above £21,000
Concurrent	Can pay both UG and PG loans
Combined max repayment	15% total (9% + 6%)

Combined Loan Repayments

Salary	Plan 2 (9%)	Postgrad (6%)	Total
£30,000	£5	£45	£50
£40,000	£80	£95	£175
£50,000	£155	£145	£300

Living Abroad

Situation	Repayment
Living overseas	Still owe
Threshold	Adjusted by country
Collection	Monthly direct debit
Not paying?	Can affect UK credit

You must inform Student Loans Company of overseas addresses.

Plan 5 Changes (From 2023)

Change	Plan 2	Plan 5
Threshold	£29,385	£25,000
Interest	RPI + up to 3% (capped at 6% as of October 2026)	RPI
Write-off	30 years	40 years
Better for	Higher earners	Lower/middle earners

Checking Your Loan Balance

Go to gov.uk/student-finance-register-login
Sign in
View balance, interest, and repayments
Check statement letters

Common Questions

Does Student Loan Affect Credit Score?

Factor	Effect
Credit score	No direct impact
Mortgage applications	Affects affordability calculation
Treated as	Income deduction, not debt

Should I Repay Early?

Consideration	Answer
Will you clear naturally?	If no, don’t overpay
Better use for money?	Pension, ISA often better
Interest rate vs investments	Compare returns
Certainty preference	Emotional vs financial

What If I Overpaid?

Situation	Action
Overpaid by error	Claim refund from SLC
Job ended mid-year	May get refund via tax
Loan fully repaid	SLC refunds excess

Plan Comparison

Feature	Plan 1	Plan 2	Plan 5
Threshold	£26,900	£29,385	£25,000
Rate	9%	9%	9%
Interest (October 2026)	4.1%	4.1% to 6%	4.1%
Write-off	Age 65	30 years	40 years
Most likely to repay	Yes	Some	More

Bottom Line

Situation	Strategy
Earning below threshold	Pay nothing
Average earner	Let it deduct automatically
High earner, will clear	May overpay
Won’t clear in 30/40 years	Never overpay
Going abroad	Inform SLC

Key principles:

UK student loans are unique — more like graduate tax
Repayments are affordable (9% above threshold)
Most won’t repay in full (especially Plan 2)
Write-off is tax-free
Don’t overpay unless you’ll definitely clear the loan

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

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