How UK student loan repayments work (2026/27)

For Plan 1, Plan 2, Plan 4 and Plan 5 you repay 9% of income above that plan’s threshold. A postgraduate Master’s or Doctoral loan is usually 6% above its own, lower, threshold. Income here means earnings before tax — salary, overtime and bonuses — not take-home pay.

That is why two graduates with the same salary can pay different amounts: they are on different plans. It is also why a large remaining balance does not mean a large monthly deduction. Someone with £50,000 still outstanding and someone with £8,000 outstanding pay the same this month if their plan and income match.

Repayments usually start in the April after you leave the course (part-time courses can start later). They stop automatically if your income drops below the threshold. There is no early-repayment penalty if you choose to pay extra through your Student Loans Company account.

You cannot pick a plan. It is set by where you applied for student finance and when the course started. The reliable check is your Student Loans Company account (the ‘active plan type’ letter) — not a guess from the year you graduated.

If you applied to Student Finance England: courses that started before 1 September 2012 are usually Plan 1; undergraduate and PGCE courses that started between 1 September 2012 and 31 July 2023 are usually Plan 2; undergraduate, PGCE and many Advanced Learner or Lifelong Learning Entitlement courses that started on or after 1 August 2023 are usually Plan 5. A Master’s or Doctoral loan is a separate postgraduate plan.

Student Finance Wales still puts most post-2012 undergraduates on Plan 2 (Wales has not moved those starters onto Plan 5). Student Awards Agency Scotland is Plan 4. Student Finance Northern Ireland is Plan 1. If your employer’s payroll plan does not match your SLC letter, show them the letter — you can usually get a refund of overpayments.

Thresholds change on 6 April. The table below is the set currently published on GOV.UK and the set our student loan calculator uses. Payroll works on the weekly or monthly figure for that pay period, which is why a one-off bonus in a single month can trigger a deduction even when your annual salary is under the yearly threshold. If the year as a whole stays under the annual threshold, you can ask for a refund after the tax year.

Plan 2 on £35,000. Income above the £29,385 threshold is £5,615. Nine percent of that is £505.35 a year, or about £42.11 a month if you simply divide by 12. That is the default example on our calculator.

Plan 5 on £45,000. The Plan 5 threshold is £25,000, so £20,000 sits above it. Nine percent is £1,800 a year — £150 a month. Same headline salary as many Plan 2 graduates, but a much larger deduction because more of the pay sits above a lower line.

Plan 2 plus a postgraduate loan on £50,000. Undergraduate: 9% of (£50,000 − £29,385) = £1,855.35. Postgraduate: 6% of (£50,000 − £21,000) = £1,740. Together £3,595.35 a year, about £300 a month. Those two percentages stack. They are not “the higher of the two”.

If you have two undergraduate-style plans (for example Plan 1 and Plan 2) and no postgraduate loan, GOV.UK’s rule is that you repay 9% above the lowest of those thresholds — not 9% twice. A single deduction is taken, then split between the loans using a cap based on the gap between the thresholds.

GOV.UK’s published illustration: Plan 1 and Plan 2, paid £3,200 a month (£38,400 a year). You repay 9% of income above the Plan 1 monthly threshold of £2,241, which is about £86 that month. You do not also pay a separate 9% above the Plan 2 line.

Our calculator models one undergraduate plan at a time, plus an optional postgraduate 6%. If you hold two undergraduate plans, use the lower-threshold plan for a conservative monthly estimate, then confirm the split on your SLC statement.

If you are employed in more than one job, each employment is tested against the weekly or monthly threshold on its own. Two part-time salaries of £1,000 and £800 a month do not add together for Plan 1 — neither job is over £2,241, so neither payroll should deduct. A £2,500 job plus a £500 job on Plan 2 should only deduct from the £2,500 job.

Self-employed income, or any year you file a Self Assessment return, is different: HMRC looks at combined income for the whole year and collects through the tax return. PAYE deductions already taken from a salary are credited against that yearly bill.

That split is why a web calculator that asks for “one salary box” is a planning estimate, not a second job or mixed-employment engine.

Interest is added to the balance even when you are below the threshold. The rate depends on the plan — Plan 2 uses a variable rate that rises with income; other plans use published rates that move with inflation measures. None of that changes the 9% or 6% taken from pay this month. Our calculator does not project interest or a payoff date.

Most loans are cancelled after a set period that depends on the plan (commonly measured in decades from when you first became liable to repay). Until then, the balance can grow if interest exceeds what you are paying. Check the cancellation rules for your plan on GOV.UK rather than assuming the loan will be cleared by extra voluntary payments.

Student loans do not appear on a credit file. Mortgage lenders still ask about them in affordability checks because the deduction reduces net pay. A practical sequence on this site: estimate the loan, then subtract it from take-home on the Income Tax calculator before you line the remainder up against a mortgage payment.

Open the student loan calculator, enter gross income, pick the plan on your SLC letter, and tick postgraduate only if you also have a Master’s or Doctoral loan. Then run take-home pay (tax and NI) and, if you sacrifice salary into a pension, the salary sacrifice calculator — sacrifice can change the income figure used for the loan.

Nothing you type is stored. If the payslip disagrees, trust the payslip and the Student Loans Company.