Guide
Student loan plans compared
There are five UK student loan repayment plans running at once, each with its own threshold, rate and write-off date. This guide shows which one applies to you, what each costs a month at four salary levels, and when overpaying is a good idea.
How repayment works
Student loan repayment is not a fixed monthly amount. It is a percentage of your income above a threshold, collected through PAYE by your employer or through Self Assessment if you are self-employed. Earn below the threshold and you repay nothing, regardless of how much you owe. Earn above it and you repay 9% of the excess on all undergraduate plans, or 6% on a postgraduate loan.
The deduction is calculated on the same earnings basis as National Insurance, which means it is taken from pay after salary sacrifice but before income tax relief on any personal pension contributions. HMRC rounds each deduction down to whole pounds. Interest accrues on the balance separately and does not change the deduction - it only changes how long the balance takes to clear.
The five plans in 2026/27
Plan 1
9% above £26,900
England, Wales and Northern Ireland courses starting before 1 September 2012
Written off 25 years after the April you were first due to repay (loans from Sept 2006).
Plan 2
9% above £29,385
England and Wales courses starting between September 2012 and July 2023
Written off 30 years after the April you were first due to repay.
Plan 4
9% above £33,795
Anyone funded through the Student Awards Agency Scotland
Written off 30 years after the April you were first due to repay (loans from Aug 2007).
Plan 5
9% above £25,000
England courses starting on or after 1 August 2023, plus Advanced Learner Loans
Written off 40 years after the April you were first due to repay.
Postgraduate
6% above £21,000
Master's and doctoral loans in England and Wales
Written off 30 years after the April you were first due to repay.
Northern Ireland postgraduate borrowers repay on Plan 1 terms and Scottish postgraduate borrowers on Plan 4 terms. Thresholds are the 2026/27 figures used by our calculator; write-off rules are from gov.uk.
What each plan costs a month
Approximate monthly deductions on a straight salary with no pension sacrifice, rounded to the nearest pound.
| Salary | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgrad |
|---|---|---|---|---|---|
| £28,000 | £8 | £0 | £0 | £22 | £35 |
| £35,000 | £60 | £42 | £9 | £75 | £70 |
| £45,000 | £135 | £117 | £84 | £150 | £120 |
| £60,000 | £248 | £229 | £196 | £262 | £195 |
The pattern is clear. Plan 5 is the most expensive at every salary because its £25,000 threshold is the lowest, while Plan 4 is the cheapest because Scottish borrowers do not start repaying until £33,795. Someone earning £35,000 on Plan 4 pays around £9 a month; the same salary on Plan 5 costs £75.
Worked example: two loans at once
A graduate earning £35,000 with a Plan 5 undergraduate loan and a postgraduate loan faces two separate deductions. The Plan 5 element is 9% of £10,000, which is £900 a year. The postgraduate element is 6% of £14,000, which is £840 a year. Together that is £1,740, or about £145 a month, on top of income tax and National Insurance.
That combined 15% marginal rate matters more than the absolute figure. A £3,000 pay rise from £35,000 to £38,000 is worth £3,000 gross but only about £1,710 net once 20% tax, 8% National Insurance and 15% of student loan come out. Anyone repaying two loans should factor that into how they judge a promotion, and into whether pension contributions are worth more than cash.
Should you overpay?
For most borrowers, no. The write-off date is the deciding factor. If your balance will still be outstanding when the loan is cancelled, every voluntary payment is money you would never otherwise have handed over, regardless of the interest rate on the balance. Plan 5 runs for 40 years, so a typical graduate repaying 9% of a modest salary will very likely never clear it.
Overpaying starts to make sense when the balance is small relative to your income and you can realistically clear it years before write-off. A Plan 1 borrower with a few thousand pounds left and a good salary is a candidate. A Plan 2 borrower with £50,000 outstanding on an average salary almost certainly is not. Check your balance in your student loan account before deciding, and remember that once you overpay you cannot get the money back.
Where deductions go wrong
- Being put on the wrong plan by a new employer. If you ticked the wrong box on a starter checklist you can end up on Plan 1 when you should be on Plan 2, which costs you around £224 a year at £35,000.
- Deductions continuing after the loan is cleared. The Student Loans Company tells HMRC to stop, but there is a lag - switching to direct debit in the final year avoids overpaying.
- Two jobs, each below the threshold. Each employer applies the threshold separately, so combined income above the threshold can produce no deduction at all, which catches up with you later.
- Postgraduate deductions missing entirely because the employer was never told. The deduction resumes once HMRC issues a start notice, but the arrears remain.
See your own numbers
The take-home pay calculator includes every plan plus the postgraduate loan, so you can see the exact monthly deduction alongside tax and National Insurance. If your deduction on a payslip does not match, work through how to check you are paying the right tax.
Common questions
Which student loan plan am I on?
It depends on where you applied and when your course started. Plan 1 covers England, Wales and Northern Ireland courses starting before 1 September 2012. Plan 2 covers England and Wales courses starting between September 2012 and July 2023. Plan 4 covers anyone who applied through the Student Awards Agency Scotland. Plan 5 covers England courses starting on or after 1 August 2023. Postgraduate master's and doctoral loans sit on a separate plan and are repaid alongside any undergraduate plan.
Do I repay two loans at once?
Yes, if you have both an undergraduate loan and a postgraduate loan. They are separate deductions with separate thresholds, so someone on Plan 5 plus a postgraduate loan pays 9% above £25,000 and 6% above £21,000 at the same time - a combined 15% marginal rate once income passes £25,000.
Is a student loan really a graduate tax?
In practice it behaves like one for most borrowers. It is deducted through payroll, it is a percentage of income above a threshold, it stops if your income falls, and the balance is written off after a set period. The difference is that it is a real debt with a real balance, so unlike a tax it can be cleared early by high earners.
Should I overpay my student loan?
Only if you are confident you will clear the balance well before the write-off date. If the balance would be written off with money still outstanding, every voluntary overpayment is money you would never have had to pay. Overpaying is more likely to make sense on Plan 1 with a small balance than on Plan 5, which runs for 40 years.
Thresholds shown are for the 2026/27 tax year. This is general information, not personal financial advice. Check your own plan and balance in your online student loan account before making voluntary repayments.