Student loan repayment plans explained
Plan 1, 2, 4, 5 or Postgraduate — which one applies to you, what the thresholds are, and how repayments are actually worked out.
Written by Jack Dev · Last updated 2 October 2026
Why there are several plans
Nobody chooses their repayment plan — it's decided entirely by when and where you started your course, not how much you borrowed or which university you went to. Each plan comes with its own repayment threshold, and once you're on one, you generally stay on it for the life of the loan, unless a later course moves you onto something newer.
The 2026/27 thresholds
Whatever plan you're on, the repayment works the same way: a percentage of your income above the threshold, taken straight out of your pay alongside — not instead of — Income Tax and National Insurance.
- Plan 1 (mostly pre-2012 English/Welsh starters, and Northern Ireland): threshold £26,900, repayment rate 9%
- Plan 2 (most English/Welsh starters 2012-2023): threshold £29,385, repayment rate 9%
- Plan 4 (Scottish students): threshold £33,795, repayment rate 9%
- Plan 5 (English starters from August 2023 onward): threshold £25,000, repayment rate 9%
- Postgraduate Loan (Master's/Doctoral, any nation): threshold £21,000, repayment rate 6% — and can run alongside an undergraduate plan at the same time
A worked example
Say you're on Plan 2, earning £40,000. You repay 9% of whatever's above £29,385 — that's 9% of £10,615, or £955.35 a year. Dip to or below the threshold and the deduction stops completely for that year, though interest keeps quietly accruing in the background regardless.
Got a Postgraduate Loan running alongside an old undergraduate one? Both apply at once, each against its own threshold — so it's entirely possible to have 9% and 6% coming out of different slices of your pay at the same time.
What it doesn't affect
Like NI, student loan repayments are calculated on gross earnings rather than taxable income, so a standard pension contribution won't touch them. Salary sacrifice will, though, since it genuinely lowers your contractual pay.
And it doesn't go on forever: once the loan (plus whatever interest has piled up) is cleared, or the write-off date arrives — typically 30 or 40 years after you became eligible to repay, depending on the plan — the deductions simply stop.
Frequently asked questions
It comes down to where and when you started your course. Check your student loan account at gov.uk, or ask the Student Loans Company directly if you're not sure.
Yes — a Postgraduate Loan can run alongside an undergraduate Plan 1, 2, 4 or 5 repayment at the same time, each calculated against its own threshold.
Only if it's taken through salary sacrifice. A standard net pay pension contribution doesn't touch the earnings your repayment is calculated on.
This guide is general information, not financial or tax advice — check GOV.UK or a qualified adviser for anything that affects a real financial decision.