15 June 2026
Student loan repayments explained: Plan 1, 2, 4, 5, and Postgraduate thresholds
How UK student loan repayments actually work in 2026/27: thresholds and rates for every plan, how it's deducted from your pay, and what it means for your take-home pay.
A UK student loan repayment isn't like paying off a personal loan or a mortgage. There's no fixed monthly instalment and no repayment at all if you're not earning enough. Instead, it's collected like a tax: a percentage of your income above a threshold, deducted automatically from your pay alongside Income Tax and National Insurance.
Which threshold and rate apply depends entirely on which "plan" your loan is on, which in turn depends on where and when you studied. Here's how it works for 2026/27.
Which plan are you on?
Your plan type is fixed when you take out the loan and doesn't change later. Broadly:
- Plan 1: English or Welsh students who started an undergraduate course before September 2012, or Scottish and Northern Irish students on income-contingent loans
- Plan 2: English or Welsh students who started an undergraduate course between September 2012 and July 2023
- Plan 4: Scottish students funded by the Student Awards Agency for Scotland (SAAS)
- Plan 5: English or Welsh students who started an undergraduate course from August 2023 onwards
- Postgraduate Loan: Master's or Doctoral loans, on top of and separate from any undergraduate plan
If you're not sure which plan you're on, check your account at gov.uk/sign-in-to-manage-your-student-loan-balance, or look for the plan type on the starter checklist you completed when you started your current job.
2026/27 thresholds and rates
Once your income for the year goes above your plan's threshold, you repay a fixed percentage of everything above it, not your whole income:
| Plan | Threshold (2026/27) | Repayment rate |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate Loan | £21,000 | 6% |
How the repayment is actually worked out
Only the income above your threshold counts. If you're on Plan 2 and earn £35,000, you don't repay 9% of £35,000; you repay 9% of the £5,615 that sits above the £29,385 threshold, which comes to £505.35 a year, or around £42 a month.
Like Income Tax and National Insurance, this is normally worked out per pay period rather than as one annual figure. If your income varies, for example a bonus month, your repayment can vary month to month even though your plan's threshold and rate stay fixed.
Can you repay two student loans at once?
Yes. An undergraduate plan (1, 2, 4, or 5) and a Postgraduate Loan are repaid independently and at the same time if you have both, each measured against its own threshold. Because the Postgraduate Loan threshold (£21,000) is lower than every undergraduate threshold, it's common to be repaying both simultaneously once your income passes somewhere between £25,000 and £34,000, depending on your undergraduate plan.
For example, someone on Plan 2 (threshold £29,385) with a Postgraduate Loan (threshold £21,000) earning £35,000 would repay 9% of the £5,615 above the Plan 2 threshold (£505.35), plus 6% of the £14,000 above the Postgraduate threshold (£840), a combined £1,345.35 a year across both loans.
How it shows up on your payslip
If you're an employee, your employer deducts student loan repayments automatically through PAYE, shown as a separate line, usually labelled "Student Loan", alongside your Income Tax and National Insurance. You don't need to do anything to trigger it, though you do need to have correctly told your employer which plan (or plans) you're on, usually via the starter checklist when you begin a job.
If you're self-employed, repayments are calculated and paid through Self Assessment instead, alongside your Income Tax and Class 4 National Insurance bill, based on your profit for the year.
Interest on your student loan
Interest accrues on your loan balance whether or not you're currently earning above the threshold, and the rate depends on your plan and, for some plans, your income. For the period 1 September 2026 to 31 August 2027: Plan 1 and Plan 5 both charge interest at 4.1% (the Retail Price Index rate); Plan 2 and Postgraduate Loans are ordinarily charged at a rate between RPI and RPI+3% depending on income, but both are capped at 6% for this period following an announcement in April 2026. None of this affects how much is deducted from your pay each month, since repayments are based purely on your income above the threshold, not your outstanding balance.
Does this affect our take-home pay calculators?
Not currently. Our Salary Calculator and Take-Home Pay Calculator show Income Tax and National Insurance, but don't yet model student loan repayments. If you have a student loan, subtract your plan's repayment, worked out as shown above, from the net figure those calculators give you to get a more complete picture of what actually lands in your account.