Student loan repayment UK rules confuse almost everyone, and that is not your fault. There are five different plans, each with its own threshold, and the one you are on depends on where and when you studied. In this guide I will show you which plan you are on, how much comes out of your pay in 2026/27, and when the debt is wiped for good.
Which Student Loan Repayment Plan Am I On in the UK?
First, you need to know your plan. Where you lived when you applied, and when your course started, decide which one you have.
- Plan 1: students from England or Wales who started before 1 September 2012, and all students from Northern Ireland.
- Plan 2: students from England who started between 1 September 2012 and 31 July 2023, and students from Wales who started on or after 1 September 2012.
- Plan 4: students from Scotland.
- Plan 5: students from England who started on or after 1 August 2023.
- Postgraduate Loan: Master’s or doctoral loans taken out from England or Wales.
Not sure? Log in to your Student Loans Company account and your statement shows your plan type. You can also check the official GOV.UK guide to repaying your student loan.
Student Loan Repayment Thresholds for 2026/27
You only repay when your income goes over your plan’s threshold. These are the student loan repayment UK thresholds for the 2026/27 tax year, which runs from 6 April 2026 to 5 April 2027.
| Plan | Yearly threshold | Monthly threshold | You repay |
|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | 9% of income above it |
| Plan 2 | £29,385 | £2,448 | 9% of income above it |
| Plan 4 | £33,795 | £2,816 | 9% of income above it |
| Plan 5 | £25,000 | £2,083 | 9% of income above it |
| Postgraduate | £21,000 | £1,750 | 6% of income above it |
On top of that, the Plan 2 threshold will stay at £29,385 until April 2030. So as wages rise, repayments will take a bigger slice of your salary each year.
Meanwhile, Plan 5 is brand new. The first Plan 5 repayments only started in April 2026, so if you graduated recently this may be your first year paying.
How Much Is a Student Loan Repayment in the UK Each Month?
The maths is simpler than it looks. You pay 9% of what you earn above the threshold, not 9% of your whole salary.
Example: Plan 2 on a £35,000 Salary
Say you earn £35,000 and you are on Plan 2. Your income above the threshold is £35,000 minus £29,385, which is £5,615. Nine per cent of that is about £505 a year, or roughly £42 a month.
Example: Plan 5 on the Same Salary
On Plan 5 the same salary costs more, because the threshold is lower. You would pay 9% of £10,000, which is £900 a year or £75 a month.
What If I Also Have a Postgraduate Loan?
Then you repay both at the same time. The postgraduate loan takes 6% of income over £21,000 on top of your undergraduate repayment. On £35,000, that adds £840 a year, or £70 a month.
If you want to see your whole payslip, my take home pay calculator shows what you keep after tax and National Insurance. You can also compare your pay with the median salary in the UK.
How UK Student Loan Repayment Is Collected
For most people, repayments come straight out of wages through PAYE, just like tax. Your employer handles it, so you do not need to do anything.
However, it works differently if you work for yourself. You repay through your Self Assessment tax return, alongside your income tax. If you also have a job, the PAYE deductions count towards that bill, so you will not pay twice.
When Is a Student Loan Written Off?
Here is the part most people miss. The government cancels whatever is left after a set number of years, and you never have to pay it back.
- Plan 1: 25 years after the April you were first due to repay. If your first loan was paid before 1 September 2006, the government cancels it when you turn 65 instead.
- 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 before 1 August 2007, the government cancels it at 65 or after 30 years, whichever comes first.
- Plan 5: 40 years after the April you were first due to repay.
- Postgraduate Loan: 30 years after the April you were first due to repay.
As a result, many graduates will never clear their loan in full. That changes how you should think about it.
Should You Pay Off Your Student Loan Early?
For most people, I would say no. If you are unlikely to clear the balance before the government writes it off, extra payments only shrink a debt the government would cancel anyway.
On the other hand, overpaying can make sense if you earn well and are on track to clear it regardless. In that case, paying early cuts the interest that keeps building on the balance.
In practice, student loan repayment in the UK works more like a graduate tax than a normal debt. Before you overpay, I would build an emergency fund and make sure you are getting your full employer pension contribution. Those usually give you a far better return.
If you are still at university, my student money tips will help your loan last all term.
Related reading: Winter Fuel Payment 2026/27.
Student Loan Repayment: Common Questions
Do student loan repayments affect my credit score?
No. Student loans don’t appear on your credit file, although lenders may ask about them and take repayments into account when you apply for a mortgage.
What happens if I move abroad?
You still have to repay. You must tell the Student Loans Company, and repayments are then based on your earnings abroad.
Should I make voluntary repayments?
Usually only if you’re likely to clear the full balance before it’s written off. Otherwise, extra payments may just reduce a debt that would have been cancelled anyway.
Student Loan Repayment UK: The Bottom Line
Student loan repayment in the UK comes down to three things: your plan, your threshold and your salary. Once you know those, you can work out exactly what comes out of your pay each month.
Finally, remember that the balance on your statement is not the number that matters. What matters is how much you will realistically repay before the government writes it off. For most graduates, that means leaving the loan alone and putting spare money to work elsewhere.
Content on IceburgWealth.com is for general information only and is not financial advice. I am not a regulated financial adviser, and tax rules and figures can change. Always do your own research and consider speaking to a qualified adviser before making any financial decision.
This article is part of our Saving and Budgeting Guide, where you will find every related article in one place.
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