Student Loan Repayment Thresholds UK

Repayment Thresholds by Plan

Student loan repayment thresholds for 2026-27:¹

Plan 1 (pre-2012 English, Northern Irish, Scottish students)

£24,990/year (£2,082/month)

Plan 2 (2012 onwards English and Welsh students)

£27,295/year (£2,274/month)

Plan 4 (Scottish students)

£31,395/year (£2,616/month)

Plan 5 (2023 onwards English and Welsh students)

£25,000/year (£2,083/month)

You repay 9% on any income above your plan's threshold. Income below the threshold is not counted.

How Much Will I Repay?

Repayment is 9% of gross income above the threshold. For example, if you earn £35,000 on Plan 2:

• Threshold: £27,295
• Income above threshold: £35,000 - £27,295 = £7,705
• Annual repayment: £7,705 × 9% = £693
• Monthly deduction: £693 ÷ 12 = £58

If you have multiple jobs or income sources, each employer deducts based on what they pay you. HMRC reconciles it at the end of the year through Self Assessment if you overpay.

When Are Loans Written Off?

Student loans are cancelled after a set period, even if you haven't repaid the full balance:²

• Plan 1: 25 years after you become eligible to repay, or when you turn 65 (whichever comes first)
• Plan 2: 40 years after the April you first became eligible to repay
• Plan 4: 30 years after the April you first became eligible to repay
• Plan 5: 40 years after the April you first became eligible to repay

Most borrowers do not repay the full loan amount. The average Plan 2 borrower will repay around 50-60% of what they borrowed before write-off.

Do I Pay Tax on Student Loan Repayments?

No. Student loan repayments are deducted from your gross pay after income tax and National Insurance. They are not a tax and you don't get tax relief on them. Think of it as a 9% additional deduction on income above the threshold.

Because they're based on income not debt, repayments automatically stop if your income drops below the threshold (for example, during parental leave or redundancy).

Repaying Early or Making Overpayments

You can repay your student loan early if you want to. Contact the Student Loans Company to make voluntary repayments.³

But most financial advisers say early repayment is not worth it unless you're certain to repay the full balance before write-off. Reasons:

• The loan is written off after 25-40 years, so high earners benefit from early repayment but average earners do not
• Repayments stop if your income drops, unlike a commercial loan
• The interest rate (RPI + 3% for Plan 2) is currently lower than mortgage rates, so paying off a mortgage first may save more money

Use a student loan calculator to model whether you'll repay the full balance. If not, overpaying just means less money in your pocket today for no benefit.

Postgraduate Loans

Postgraduate loans (Masters and PhD) have a separate threshold of £21,000 for 2026-27. You repay 6% on income above that threshold. If you have both an undergraduate and postgraduate loan, you repay both at the same time (9% + 6% = 15% total on the overlapping income).