If you took out a UK student loan, repayments are income-contingent: you pay a percentage of everything you earn above a threshold, collected straight from your salary through PAYE — much like tax. Earn under the threshold and you pay nothing, whatever your balance.
The plans, thresholds and rates (2026/27)
| Plan | You repay above | Rate |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate Loan | £21,000 | 6% |
The rate applies only to the slice above the threshold. On a £40,000 salary with a Plan 2 loan, you repay 9% of the £10,615 above £29,385 — about £955 a year, or roughly £80 a month.
Which plan am I on?
It depends on where and when you studied:
- Plan 1 — undergraduates in England/Wales who started before September 2012, or Northern Ireland students.
- Plan 2 — England/Wales undergraduates who started between September 2012 and July 2023.
- Plan 4 — Scottish students.
- Plan 5 — England undergraduates who started from September 2023 onwards.
- Postgraduate Loan — a master's or doctoral loan, repaid at 6%.
If you are unsure, your repayment plan is shown in your online student finance account, and your payslip will show the deduction.
Combining a postgraduate and an undergraduate loan
If you have both a postgraduate loan and an undergraduate one, you repay both at the same time — 6% above £21,000 for the postgraduate loan and 9% above your undergraduate threshold. On a good salary that can mean 15% of part of your income going to loans, so it is worth seeing the combined effect. Our take-home calculator lets you tick more than one plan.
Things worth knowing
- It's based on income, not your balance. Repayments stop automatically if your pay drops below the threshold, and the loan is written off after a set period (which varies by plan) — so for many people it behaves more like a graduate tax than a debt.
- The Plan 2 threshold is being frozen at £29,385 for three years from April 2027 — a freeze that, like frozen tax thresholds, slowly increases what you repay as wages rise.
- It does not affect your tax or National Insurance — it is a separate deduction on top.
- Overpaying is optional and only worthwhile for some borrowers; because the debt can be written off, paying it down early is not always the best use of money.
In short
You repay 9% (or 6% for a postgraduate loan) of what you earn above your plan's threshold, collected through your salary. Knowing your plan and threshold tells you exactly what comes off — and if you have two loans, they stack. The take-home calculator shows the deduction alongside tax, NI and pension.