Guide · Student loans

Student loan repayments explained

Thresholds, rates, interest and write-off dates for every UK student loan plan in 2026/27, with a worked example and common mistakes. Start by plan 1 (pre-2012 England/Wales, all Northern Ireland), Plan 2 (England/Wales 2012 to 2023), Plan 4 (Scotland), Plan 5 (England from 2023) or Postgraduate Loan. Your SLC statement says which.

By Uthman ChoudhuryPublished 20 September 2026Updated 20 September 2026

Skip the reading: use the Student Loan Repayment Calculator for your own numbers.

How do you work out your student loan repayment?

Identify your plan. Plan 1 (pre-2012 England/Wales, all Northern Ireland), Plan 2 (England/Wales 2012 to 2023), Plan 4 (Scotland), Plan 5 (England from 2023) or Postgraduate Loan. Your SLC statement says which.
Find the threshold. Repayments start only on income above the plan threshold, which changes most Aprils.
Apply the rate. Take 9% of income above the threshold (6% for Postgraduate Loans). Employers work this out per pay period and round down to the pound.
Check the write-off date. Plan 1: 25 years, Plan 2 and 4: 30 years, Plan 5: 40 years, Postgraduate: 30 years, all counted from the April after you finished your course.

How do student loan repayments work?

Student loans are repaid as a share of income, not as a fixed monthly amount. Once you finish your course and the following April arrives, your employer deducts 9% of everything you earn above the threshold for your plan (6% for a Postgraduate Loan). Earn less than the threshold and you pay nothing. Interest is added to the balance but never changes what you pay each month; it only affects how long you pay for and whether you clear the balance before it is written off.

Plan	Threshold 2026/27	Rate	Interest	Written off
Plan 1	£26,900	9%	3.2%	25 years
Plan 2	£29,385	9%	3.2% to 6.2%	30 years
Plan 4	£33,795	9%	3.2%	30 years
Plan 5	£25,000	9%	3.2%	40 years
Postgraduate Loan	£21,000	6%	6.2%	30 years

Worked example: £2,900 a month on Plan 2

Monthly pay of £2,900 is £451 above the monthly threshold of £2,449. Nine per cent of that is £40 after rounding down. Over a year that is £480. Whether the borrower clears a £45,000 balance depends almost entirely on salary growth over the next 30 years; at 3% growth they do not, and the remainder is written off.

What do people get wrong?

Panicking about the interest rate. For most Plan 2 and Plan 5 borrowers the interest rate has no effect on what they pay, because the balance is written off.
Overpaying by default. Only overpay if a projection shows you would clear the loan anyway and the interest rate beats what you could earn elsewhere.
Not checking deductions after the loan is cleared. Employers can keep deducting for months; claim any overpayment back from SLC.

Run your own projection with the student loan repayment calculator.

Frequently asked questions

Do student loan repayments count as tax?

Legally no, but they work like one: taken through PAYE as a percentage of income above a threshold, with nothing owed in years you earn less. Unlike tax, the deductions stop when the balance is cleared or written off.

What happens to my student loan if I move abroad?

You must tell the Student Loans Company and repay directly. Thresholds are adjusted for the cost of living in each country, and if you do not provide income details SLC charges a fixed monthly amount, often higher than the income-based repayment.

Can I pay off my student loan early?

Yes, with no penalty. Whether it is worthwhile depends on whether you would clear the loan anyway before write-off. For many Plan 2 borrowers, voluntary repayments simply reduce the amount that would have been written off.