Student loans in the UK are different from traditional loans. You only start repaying them once you earn over a certain threshold, and your repayments are based on what you earn rather than what you owe.

Which Plan Are You On?

Your repayment plan depends on when and where you went to university:

• Plan 1: Usually for students who started in England or Wales before 2012.
• Plan 2: For most students who started after 2012 in England or Wales.
• Plan 4: For Scottish students.
• Plan 5: New for students starting from 2023 onwards in England.
• Postgraduate Loan: For those with a Master’s or PhD loan.

Repayment Thresholds and Rates (2025/26)

You repay a percentage of your income over the threshold. Here are the current thresholds and rates:

• Plan 1: 9% of income over £24,990
• Plan 2: 9% of income over £27,295
• Plan 4: 9% of income over £31,395
• Plan 5: 9% of income over £25,000
• Postgraduate: 6% of income over £21,000

Example Repayments

Plan 2 Example: Earning £35,000

• Threshold: £27,295
• Amount over threshold: £7,705
• 9% of £7,705 = £693.45 per year (£57.79 per month)

When Do Repayments Stop?

Your student loan is written off after a set number of years (depending on your plan), even if you haven’t repaid the full amount:

• Plan 1: 25 years after the April you were first due to repay
• Plan 2: 30 years
• Plan 4: 30 years
• Plan 5: 40 years
• Postgraduate: 30 years

How Interest Works

The interest rate on your student loan depends on your plan and income. For example:

• Plan 2: Interest = RPI + up to 3% (based on income)
• Plan 5: Interest = RPI only, no extra %

Interest is added monthly but doesn’t affect how much you repay — it only affects how long the loan lasts.

For most people, student loans work more like a graduate tax than a traditional debt. If you don’t earn enough, you don’t repay anything, and any remaining balance is eventually wiped.