Student loan repayments explained
You repay a share of what you earn above a threshold, not a fixed amount. Here is how it works for each plan.
The short answer
You repay 9% of your earnings above your plan's threshold, and 6% above £21,000 for a postgraduate loan. The repayments come out of your pay automatically, and they depend on your income, not how much you borrowed.
The thresholds
| Plan | Threshold | Rate |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate loan | £21,000 | 6% |
See GOV.UK: What you pay. Not sure which plan you are on? GOV.UK explains how to find out.
Worked examples
- Plan 2 on £35,000: 9% of £5,615 is about £505 a year, or £42 a month.
- Plan 2 on £40,000: 9% of £10,615 is about £955 a year, or £80 a month.
- Plan 5 on £30,000: 9% of £5,000 is £450 a year.
- Plan 1 on £30,000: 9% of £3,100 is £279 a year.
- Postgraduate loan on £30,000: 6% of £9,000 is £540 a year, on top of any plan above.
You can see the effect on your pay in the take-home pay calculator.
When it is written off
Loans are cancelled after a set time, so many people never repay the full amount. This is usually 25 years for Plan 1, 30 years for Plans 2 and 4 and for postgraduate loans, and 40 years for Plan 5, counted from when you first become due to repay. Check GOV.UK for the exact rule for your plan.
Should you overpay?
Whether it is worth paying more depends on your plan and your earnings. If you are likely to earn enough to clear your loan before it is written off, overpaying can save interest. If not, the extra money may do more good elsewhere, such as in savings or a mortgage. Check your balance and options before overpaying, and consider unbiased advice from MoneyHelper.
Where to learn more
This guide is for information only and is not financial advice. Check your own loan terms.