How Do Student Loan Repayments Work in the UK?
Last updated: 24 October 2026 · Sourced from official UK government publications
Figures are for the 2026/27 tax year and come from gov.uk. General information only, not financial advice. See the disclaimer below.
You repay 9% of what you earn above your plan’s threshold (6% for a postgraduate loan), and only while your income is over it. Your employer takes it from your pay. Whatever is left when the loan’s term ends is written off.
How much do you repay, and when does it start?
The rule is the same for every plan: a percentage of the income above a threshold. Income below the threshold is not touched.
The rate is 9% for Plans 1, 2, 4 and 5. It is 6% for a postgraduate loan. Gov.uk says the amount you owe has no effect on how much you repay each year. A bigger balance does not mean a bigger monthly deduction.
| Loan | Yearly threshold | Monthly | Weekly | Rate |
|---|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | £517 | 9% |
| Plan 2 | £29,385 | £2,448 | £565 | 9% |
| Plan 4 | £33,795 | £2,816 | £649 | 9% |
| Plan 5 | £25,000 | £2,083 | £480 | 9% |
| Postgraduate | £21,000 | £1,750 | £403 | 6% |
The earliest you start repaying is the April after you leave your course. Even then, nothing comes out until your income is over the threshold. If it never gets there, you never repay. Repayments also stop if you stop working or your income drops below the threshold.
Thresholds are reviewed each year on 6 April, so these numbers will change.
Which plan are you on?
You do not choose your plan. It depends on where you studied and when your course started. Gov.uk sets it out like this:
- Plan 1: English or Welsh courses that started before 1 September 2012, and Northern Ireland courses (undergraduate and postgraduate).
- Plan 2: English undergraduate courses that started between 1 September 2012 and 31 July 2023, and Welsh undergraduate courses that started on or after 1 September 2012.
- Plan 4: Scottish courses, undergraduate and postgraduate.
- Plan 5: English undergraduate courses that started on or after 1 August 2023.
- Postgraduate Loan: English or Welsh master’s or doctoral courses.
You can be on more than one plan if you have more than one loan. Your Student Loans Company account shows which ones you have.
How is the money taken from your pay?
If you are employed, your employer deducts it through payroll (PAYE), alongside income tax and National Insurance. It appears on your payslip as a student loan deduction.
The deduction is worked out on each pay period. If you work two jobs, each one is looked at on its own. Gov.uk says only the pay above the threshold in each job counts, and your incomes are not added together.
Income here means what you earn before tax and other deductions, including bonuses and overtime. A bonus month can therefore produce a bigger deduction than a normal month.
It is a separate line from income tax and National Insurance. Your tax code and your student loan plan are unrelated. For how those other deductions work, see income tax explained and National Insurance explained.
If you are self-employed, or file a Self Assessment return, HMRC works out the yearly repayment from your return. It uses your income for the whole year, including any employment income, and takes off anything already deducted from your salary.
What does it look like in pounds?
Take someone on Plan 2 earning £35,000 a year. The 2026/27 Plan 2 threshold is £29,385.
- Income above the threshold: £35,000 − £29,385 = £5,615
- Repayment at 9%: £5,615 × 0.09 = £505.35 a year
- Spread over 12 months: £505.35 ÷ 12 = about £42.11 a month
Check it monthly. Monthly pay is £35,000 ÷ 12 = £2,916.67. The monthly threshold on the HMRC employer page is £2,448.75. The gap is £467.92, and 9% of that is about £42.11. Same answer.
The same £35,000 salary works out differently on each loan:
| Loan | Income above threshold | Yearly repayment |
|---|---|---|
| Plan 1 | £35,000 − £26,900 = £8,100 | £8,100 × 9% = £729.00 |
| Plan 2 | £35,000 − £29,385 = £5,615 | £5,615 × 9% = £505.35 |
| Plan 4 | £35,000 − £33,795 = £1,205 | £1,205 × 9% = £108.45 |
| Plan 5 | £35,000 − £25,000 = £10,000 | £10,000 × 9% = £900.00 |
| Postgraduate | £35,000 − £21,000 = £14,000 | £14,000 × 6% = £840.00 |
To see how a deduction sits next to tax and National Insurance on a real salary, try the take-home pay calculator.
What if you have a postgraduate loan as well?
The two are calculated separately and added together. Gov.uk says you repay 6% of income over £21,000 a year for the postgraduate loan, plus 9% of income over the lowest threshold of your other plans.
Say someone has Plan 2 and a postgraduate loan, on £35,000. That is £840.00 plus £505.35, or £1,345.35 a year in total.
If you have two undergraduate plans with no postgraduate loan, gov.uk says you repay 9% of income over the lowest of the thresholds, in one deduction per pay period. There is a cap on the share going to the lower-threshold plan, and anything above it goes to the other loan.
How does interest work?
Interest is added to the balance whether or not you are working and whether or not you are above the threshold. It is a charge on what you owe, separate from what comes out of your pay.
At the time of writing, gov.uk gives these rates:
- Plans 1, 4 and 5: 4.1%.
- Postgraduate Loan: 6%.
- Plan 2: a variable rate. While studying it is RPI plus 3%, capped at 6%. After you leave the course it depends on income: 4.1% at £29,385 or less, 4.1% plus up to 1.9% between £29,386 and £52,884, and 6% at £52,885 or more.
In plain terms, interest is added on top of the balance. Your repayments go towards it. For some borrowers the balance can stay the same or grow even while they repay, because the yearly interest is more than the yearly repayments.
That is a feature of how the loans work, not a mistake. Because the repayment is a percentage of income, it is not designed to clear the balance within a set number of years. Your statement is normally available in your online repayment account by the end of August.
When is a student loan written off?
Every loan has an end date. Anything unpaid at that point is written off, which means it is cancelled and you owe nothing further. Gov.uk gives these terms:
- Plan 1: 25 years after the April you were first due to repay, if your first loan was paid on or after 1 September 2006. Before that date, it is written off when you are 65.
- Plan 2: 30 years after the April you were first due to repay.
- Plan 4: 30 years after the April you were first due to repay, if your first loan was paid on or after 1 August 2007. Earlier loans are written off at 65 or after 30 years, whichever comes first.
- Plan 5: 40 years after the April you were first due to repay.
- Postgraduate Loan (England and Wales): 30 years after the April you were first due to repay.
The loan is also cancelled on death, once the Student Loans Company is told and given evidence. It may be cancelled if you claim certain disability benefits.
The write-off clock runs from the April you were first due to repay. It does not depend on how much you have paid back.
What happens if you work or live abroad?
Leaving the UK does not pause the loan. If you go abroad for more than 3 months, you must tell the Student Loans Company. That includes travelling, not only moving.
Gov.uk says you are expected to keep repaying unless you can show your overseas income is below the threshold, for example with a recent bank statement. If you do not tell the Student Loans Company, you can build up arrears, which are added to your regular repayments.
When you return after more than 3 months, you must update your employment details. Gov.uk says that if you do not, you may pay more than you need to or be charged a higher interest rate.
The page does not set out the overseas threshold amounts. The Student Loans Company’s overseas guidance is the place to check them.
Can you pay back extra?
Yes. Voluntary extra repayments exist, and you can make them online by card or Direct Debit, by bank transfer or by cheque. You can say whether a payment goes to your total balance or to one specific plan.
Gov.uk states there is no penalty for paying extra. It also states that extra repayments cannot be refunded, and that you may not benefit if the loan would be written off anyway. It points people to check the write-off date and to speak to a financial adviser if unsure. Kvanta does not suggest what any individual should do.
The full details are on gov.uk’s extra repayments page.
More detail
Part-time and several courses. If you took several courses at once, they could have separate repayment start dates. For part-time study, gov.uk says repayment starts four years after the course began, but only if the course is longer than four years and started before 1 January 2027.
Plan 2 interest bands. The band that applies depends on your income for the year, and gov.uk says the rate can change on 6 April after you finish or leave your course. Income-based bands mean two people on the same plan can be charged different rates.
Refunds. Keep your payslips and P60. Gov.uk says you will need them if you want to claim a refund.
Weekly versus monthly. The weekly and monthly thresholds are the yearly figure spread over 52 weeks or 12 months. Employers use the more exact numbers: Plan 1 is £2,241.66 a month, Plan 2 is £2,448.75, Plan 4 is £2,816.25, Plan 5 is £2,083.33 and the postgraduate loan is £1,750.
Related reading. See income tax explained for how the rest of your payslip is built.
Self-employed. The repayment is settled through the tax return, usually alongside your tax bill, rather than through monthly payroll.
Sources
Every figure above was checked against these gov.uk pages on 24 October 2026.
- Thresholds, rates, multiple loans, interest: https://www.gov.uk/repaying-your-student-loan/what-you-pay
- 2026/27 monthly and weekly deduction thresholds: https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027
- When repayments start, part-time rule: https://www.gov.uk/repaying-your-student-loan/when-you-start-repaying
- Which plan applies: https://www.gov.uk/repaying-your-student-loan/which-repayment-plan-you-are-on
- Write-off, death and disability: https://www.gov.uk/repaying-your-student-loan/when-your-student-loan-gets-written-off-or-cancelled
- Working abroad: https://www.gov.uk/repaying-your-student-loan/overseas
- Extra repayments: https://www.gov.uk/repaying-your-student-loan/make-extra-repayments
- Overview: https://www.gov.uk/repaying-your-student-loan
Tools and guides
- Take-home pay calculator: see what you keep after tax, National Insurance and a student loan.
- Income tax explained: bands, the personal allowance and how PAYE works.
- National Insurance explained: what it is and what it pays towards.
Want the rules in your inbox?
Thresholds change every April. If you want to hear about it the morning it happens, subscribe to Kvanta. Best part? It’s free.
Not financial advice. This guide explains how UK student loan repayments work using gov.uk information as of October 2026. It is for information only and is not personal financial advice. Kvanta is not authorised or regulated by the FCA. Individual circumstances vary. Always check gov.uk/repaying-your-student-loan for the latest rules.