Most people borrow the money, graduate, and then spend years half-wondering when the repayments actually kick in — and whether they’re paying too much, too little, or anything at all.
The UK student loan system is genuinely confusing, mostly because there are now five separate repayment plans running at the same time, each with different thresholds, interest rates, and write-off dates. Which one you’re on depends entirely on when and where you studied.
This guide cuts through all of it. By the end, you’ll know exactly which plan you’re on, when your repayments start, how much comes out of your salary, and what happens to whatever you haven’t paid off.
What’s on this page?
- Which Repayment Plan Are You On?
- When Do Repayments Actually Start?
- How Much Do You Repay Each Month?
- 2026/27 Repayment Thresholds — All Plans
- Real Examples: What You’d Pay at Different Salaries
- Interest Rates on Student Loans 2026/27
- When Does Your Student Loan Get Written Off?
- What If Your Income Drops?
- Should You Make Voluntary Repayments?
- Frequently Asked Questions
Which Repayment Plan Are You On?
Before anything else, you need to know your plan — because everything else flows from that.
| Plan | Who it applies to |
| Plan 1 | English/Welsh students who started before September 2012, or Northern Irish students |
| Plan 2 | English/Welsh undergraduates who started between September 2012 and July 2023 |
| Plan 4 | Scottish students (funded by SAAS) |
| Plan 5 | English undergraduates who started from August 2023 onward |
| Postgraduate Loan | Master’s and PhD students — runs alongside your undergraduate plan |
Not sure which plan you’re on? Your payslip will show the plan type once repayments begin, or you can check directly with the Student Loans Company.
Most people reading this will be on Plan 2 or Plan 5 — so those get the most attention below.
When Do Repayments Actually Start?
Here’s the part that trips people up: repayments don’t start the moment you graduate. There are two conditions that both need to be true before anything comes out of your pay.
Condition 1: The April after you leave your course You won’t repay a penny before the April following your graduation — regardless of what you earn. If you finish in June 2026, repayments can’t start before April 2027 at the earliest.
Condition 2: Your income has to be above the threshold Even after that April, you only repay if you’re earning above your plan’s repayment threshold. If your income falls below the repayment threshold, your repayments stop automatically and only restart when your income is over the threshold again.
One important note for Plan 5 borrowers specifically: monthly repayments for Plan 5 student loans began in April 2026 — so if you started university from August 2023 onward, this is the first tax year your repayments are active.
How Much Do You Repay Each Month?
Here’s the simple version — you never pay back a percentage of your whole salary. You only pay on the part that sits above a certain amount. That’s it.
- Most plans (1, 2, 4, and 5): You pay back 9% of whatever you earn above your threshold
- Postgraduate Loan: You pay back 6% of whatever you earn above £21,000
Let’s make that real. Say you’re on Plan 2 and earning £35,000 a year. Your threshold is £29,385 — so only £5,615 of your salary actually gets touched. Nine percent of that works out to around £505 a year — or about £42 a month. That’s less than a Netflix subscription and a takeaway combined.
2026/27 Repayment Thresholds — All Plans
The 2026/27 thresholds are: Plan 1: £26,900 per year, Plan 2: £29,385 per year, Plan 4: £33,795 per year, Plan 5: £25,000 per year, and Postgraduate Loan: £21,000 per year.
| Plan | Annual Threshold | Monthly Threshold |
| Plan 1 | £26,900 | £2,241 |
| Plan 2 | £29,385 | £2,448 |
| Plan 4 | £33,795 | £2,816 |
| Plan 5 | £25,000 | £2,083 |
| Postgraduate | £21,000 | £1,750 |
Now, a few things worth paying attention to here:
Plan 2 is getting frozen. The threshold goes up to £29,385 from April 2026 — but then it just sits there until April 2030. It won’t budge. So as salaries gradually rise over those four years, more and more graduates will creep above the line and start repaying, even though the threshold itself hasn’t moved. It’s a quiet way of pulling more people into repayment without making any loud announcements about it.
Plan 5 starts earlier. If you started uni from August 2023, you’re on Plan 5 — and your threshold is only £25,000. That’s the lowest of any undergraduate plan. So compared to a Plan 2 graduate on the same salary, you’ll start repaying sooner. Same pay, different rules.
Scotland gets the best deal. A Scottish graduate on Plan 4 would need to earn over £33,795 before they pay a single penny back. Meanwhile, someone on Plan 5 earning £33,000 is already paying over £700 a year. Same salary, totally different picture — just because of which plan they’re on.
Real Examples: What You’d Pay at Different Salaries
Plan 2 examples (£29,385 threshold)
| Salary | Above threshold | Monthly repayment |
| £25,000 | £0 | £0 |
| £30,000 | £615 | £5 |
| £35,000 | £5,615 | £42 |
| £45,000 | £15,615 | £117 |
| £60,000 | £30,615 | £230 |
Plan 5 examples (£25,000 threshold)
| Salary | Above threshold | Monthly repayment |
| £25,000 | £0 | £0 |
| £30,000 | £5,000 | £38 |
| £35,000 | £10,000 | £75 |
| £45,000 | £20,000 | £150 |
| £60,000 | £35,000 | £263 |
The monthly amounts feel manageable — because they are, for most people. The sting comes from how long you’re paying them.
Interest Rates on Student Loans 2026/27
Interest starts accruing from the day Student Finance sends money to your university — not from graduation. The rates adjust annually based on the Retail Price Index (RPI).
Plan 2: Interest is tied to RPI. While studying, you’re charged RPI + 3%. After graduation, the rate scales between RPI and RPI + 3% depending on your income. From 1 September 2026, interest rates on Plan 2 student loans will be capped at 6%, regardless of the RPI figure.
Plan 5: Interest is set at RPI only — simpler, and generally lower than Plan 2.
Plan 1 and Plan 4: Interest is capped at 1.5% — far lower than Plans 2 and 5, and well below current savings rates.
Postgraduate Loan: Interest is set at RPI + 3% throughout repayment.
When Does Your Student Loan Get Written Off?
This is probably the most misunderstood part of the whole system — and for most borrowers, it matters more than the monthly payment.
| Plan | Write-off point |
| Plan 1 | 25 years after you first became eligible to repay |
| Plan 2 | 30 years after you first became eligible to repay |
| Plan 4 | 30 years after you first became eligible to repay |
| Plan 5 | 40 years after you first became eligible to repay |
| Postgraduate | 30 years after you first became eligible to repay |
Now here’s the bit that changes everything.
The majority of Plan 2 borrowers will never fully pay off their loan before the 30-year clock runs out. The IFS — basically the people who crunch these numbers for a living — reckon only around 20–25% of Plan 2 borrowers will actually clear their debt in full. Everyone else? The remaining balance just gets wiped at the end. Gone. No phone calls, no debt collectors, no mark on your credit file. It simply stops existing.
So for most people, a student loan doesn’t really behave like a normal loan at all. It’s much closer to an extra tax you pay while you’re earning well — and then one day it quietly disappears.
Plan 5 borrowers have it a bit tougher though. The threshold is lower and the write-off takes 40 years instead of 30. So even fewer people on Plan 5 are expected to pay theirs off completely.
But the principle is the same. Whatever’s left when your write-off date arrives — whether that’s £5,000 or £50,000 — it vanishes. Just like that.
What If Your Income Drops?
One of the genuinely good features of income-contingent repayment is what happens when things go wrong. If your income falls below the threshold — redundancy, career break, part-time work, illness — your repayments stop automatically. No application, no form, no phone call needed.
They restart when your income crosses the threshold again. The loan balance keeps accruing interest during the gap, but you won’t be chased for missed payments or charged penalties.
Should You Make Voluntary Repayments?
This depends entirely on which plan you’re on and whether you’re likely to clear the debt before write-off.
If you’re on Plan 1 or Plan 4: Probably not worth it. Interest rates are so low that your money does better in a savings account or pension than clearing the loan early.
If you’re on Plan 2: For most people, overpaying isn’t the smart move. If you’re unlikely to clear the balance in 30 years anyway, early repayments just reduce the amount written off — you’re essentially paying more than you’d otherwise need to. The exception is if your balance is small and you’re confident you’ll clear it regardless.
If you’re on Plan 5: The 40-year write-off and lower threshold mean more borrowers will repay in full. If your balance is manageable and you’re a high earner, voluntary repayments become worth considering — but run the numbers first.
How NZ Associates Can Help
Student loan repayment is one of those areas where a conversation with someone who knows the system can save you from making the wrong decision — whether that’s overpaying a loan that would have been written off anyway, or misunderstanding what your monthly deductions actually mean for your take-home pay.
At NZ Associates, our advisers help current students, graduates, and parents understand exactly how student finance works — including repayments. The guidance is completely free.
Book a free consultation today and get a clear answer for your situation.
Frequently Asked Questions
When do I actually start repaying?
The April after you finish or leave your course — but only if you’re earning above your plan’s threshold. Earning below it? You pay nothing at all, simple as that.
What’s the Plan 2 threshold in 2026/27?
£29,385 a year — that’s about £2,448 a month. Just remember, this threshold is frozen right where it is until April 2030. It won’t go up.
What’s the Plan 5 threshold?
£25,000 a year, or roughly £2,083 a month. Plan 5 covers English undergraduates who started university from August 2023 onwards.
How much of my salary actually goes toward the loan?
Just 9% of whatever you earn above your threshold — nothing below it. On a £35,000 salary on Plan 2, that works out to around £42 a month. That’s it.
Does my student loan mess up my credit score?
No — student loans don’t show up on your credit file at all. Your credit score stays completely untouched. The one thing to know is that mortgage lenders will factor in your monthly repayments when working out how much they’ll lend you — so it can affect borrowing power slightly, but it won’t hurt your score.
What if I never pay it all off?
It gets written off completely. Plan 1 after 25 years, Plans 2 and 4 after 30 years, Plan 5 after 40 years. Whatever’s left at that point just disappears — no consequences, no chasing, nothing.
What if I move abroad — do I still have to repay?
Yes. Moving overseas doesn’t make the loan go away. You let the Student Loans Company know, and they work out your repayments based on what you earn in that country. If you don’t tell them? They’ll set a fixed repayment amount regardless of your actual income — so it’s always better to just notify them.
Can I pay off my student loan early?
You can — overpayments are allowed whenever you like. But whether it actually makes financial sense is a different question. For most Plan 2 and Plan 5 borrowers, the majority won’t clear the debt before write-off anyway — so overpaying often isn’t the smartest move. Worth thinking through carefully before you do it.
Written by George Turner — UK Student Finance Specialist with over a decade of experience guiding students and parents through SFE, SAAS, SFW, and SFNI applications.
Reviewed by a Senior Student Finance Consultant and UK Higher Education Specialist.
Further Reading & Sources
