Student loan repayments are deducted via PAYE at 9% of income above your plan's threshold (6% for Postgraduate loans). You only repay when you earn above the threshold — if income drops below it, repayments stop automatically. Plans 1, 2 and 4 have different thresholds that are updated each April; Plan 5 (started from August 2023) has a £25,000 threshold.
- Student loan repayments are collected via PAYE — your employer deducts them automatically based on HMRC instructions.
- Rate: 9% of income above the threshold for Plans 1/2/4/5; 6% for Postgraduate loans.
- Thresholds are updated each April (Plans 1/4 by RPI; Plan 2 by average earnings since 2025). Always verify on gov.uk.
- You do not repay if your income is below the threshold — no minimum monthly payment exists.
- Repayments do not reduce your outstanding loan balance faster just because you earn more — the percentage is fixed.
- Multiple plans run simultaneously (e.g. Plan 2 + Postgraduate); repayments stack.
- Loans are written off after 25 years (Plan 1/2/4) or 30 years (Plan 5) from the April after your final year of study, or at age 65 (Plan 1, if older).
2026/27 student loan thresholds and rates
| Plan | Who it applies to | Threshold (approx.) | Rate |
|---|---|---|---|
| Plan 1 | Started before Sep 2012 (England/Wales) or Northern Ireland | ~£24,990 | 9% |
| Plan 2 | Started Sep 2012–Jul 2023 (England/Wales) | ~£27,295 | 9% |
| Plan 4 | Scotland | ~£31,395 | 9% |
| Plan 5 | Started from Aug 2023 (England/Wales) | £25,000 | 9% |
| Postgraduate | Postgraduate Master's or Doctoral loan | £21,000 | 6% |
⚠ Thresholds for Plans 1, 2 and 4 are uprated each April and should be verified at gov.uk — repaying your student loan.
Worked example — £35,000 salary, Plan 2
| Item | Amount |
|---|---|
| Gross annual income | £35,000 |
| Plan 2 threshold | £27,295 |
| Income above threshold | £7,705 |
| Repayment rate | 9% |
| Annual repayment | £693.45 |
| Monthly repayment | £57.79 |
When are student loan repayments written off?
Plan 1: 25 years after you became eligible to repay, or when you reach age 65 (whichever comes first). Plan 2: 30 years after you became eligible. Plan 4 (Scotland): 30 years. Plan 5 (new from 2023): 40 years. Postgraduate: 30 years. If the outstanding balance at the write-off date is not fully repaid, the remainder is cancelled — no tax is charged on the write-off.
Frequently asked questions
Does repaying faster save money?
It depends on whether you expect to clear the loan before write-off. If you won't (many Plan 2 borrowers won't), overpaying simply reduces a balance that would have been written off anyway — making you worse off. Run the numbers or use the Student Loans Company's own modelling tool before making voluntary overpayments.
I have both a Plan 2 and a Postgraduate loan — do I pay both?
Yes. Repayments on each plan are calculated separately and both deducted from payroll. For example, on £35,000: Plan 2 repayment £694/yr + Postgraduate repayment (£35,000 − £21,000) × 6% = £840/yr — combined £1,534/yr.
What happens to my student loan if I move abroad?
You are still obligated to repay based on your overseas income using HMRC's overseas income thresholds, which vary by country. Notify the Student Loans Company if you move abroad for more than 3 months.