Student loan repayments are not really a loan repayment in the ordinary sense. Nothing is fixed, the amount is set entirely by what you earn, and for most graduates the balance is written off before it is cleared. Which plan you are on — decided by where and when you started studying, not by anything you chose — changes what comes out of your pay by hundreds of pounds a year on an identical salary.

The 2026/27 thresholds

You repay a fixed percentage of everything you earn above a threshold. Nothing below it is touched.

Plan 1 — 9% above £26,900
Plan 2 — 9% above £29,385
Plan 4 (Scotland) — 9% above £33,795
Plan 5 — 9% above £25,000
Postgraduate loan — 6% above £21,000

Every one of these rose for 2026/27. Plan 2 in particular had been frozen at £27,295 for several years before recent uprating, which quietly increased repayments for everyone on it while the threshold stood still.

Which plan am I on?

Plan 1 — English or Welsh students who started before 1 September 2012. Also Northern Irish students, including current ones.
Plan 2 — English or Welsh students who started between 1 September 2012 and 31 July 2023.
Plan 4 — Scottish students, whenever you started.
Plan 5 — English students who started on or after 1 August 2023.
Postgraduate loan — a master's or doctoral loan in England or Wales. This sits on top of any undergraduate plan.

If you are unsure, your online student loan account shows the plan, and so does your payslip — the deduction is normally itemised by plan number.

What that costs at real salaries

The arithmetic is simple: subtract the threshold from your salary and take 9% (or 6% for postgraduate). On £40,000 a year:

Plan 1: (£40,000 − £26,900) × 9% = £1,179
Plan 2: (£40,000 − £29,385) × 9% = £955.35
Plan 4: (£40,000 − £33,795) × 9% = £558.45
Plan 5: (£40,000 − £25,000) × 9% = £1,350
Postgraduate: (£40,000 − £21,000) × 6% = £1,140

The spread is the striking part. On the same £40,000, a Plan 5 graduate pays £791.55 a year more than a Plan 4 graduate — about £66 a month — purely because of where and when they went to university.

If you have both an undergraduate and a postgraduate loan, the two are charged together. On £40,000 with Plan 2 and a postgraduate loan that is £955.35 + £1,140 = £2,095.35 a year, or 15% of everything above the higher of the two thresholds once both are in play.

How it is actually collected

Through PAYE, alongside income tax and National Insurance — but with one important difference. Repayments are worked out on each pay period in isolation, not cumulatively across the year.

That has a real consequence. If you are paid monthly on Plan 2, the threshold is applied as £2,448.75 a month. Earn a bonus in December and you repay 9% of everything above that figure in December, even if your annual income for the year ends up below the annual threshold. Unlike income tax, this does not correct itself in later months, though you can reclaim it from the Student Loans Company after the year ends if your total income was genuinely under the threshold.

The same logic means a period of unemployment does not generate a refund of repayments made while you were working. Each month stands alone.

Repayments are based on pay, not on the balance

Nothing about your repayment depends on how much you owe. Someone with £15,000 outstanding and someone with £75,000 outstanding, on the same salary and plan, pay exactly the same each month. The balance only determines whether you ever clear it.

Interest is added on top. Plan 2 and postgraduate loans carry the highest rates, historically linked to RPI plus a margin that varies with income; Plan 1, 4 and 5 rates are lower. For a large balance on a middling salary, the interest can exceed the repayments, so the amount owed grows every year despite paying consistently. This is normal and, for most people, not worth worrying about — because of what happens at the end.

When the balance is written off

Plan 1 — 25 years after the April you were first due to repay, for loans taken from 2006 onwards. Older loans are written off at 65.
Plan 2 — 30 years.
Plan 4 — 30 years.
Plan 5 — 40 years.
Postgraduate — 30 years.

Write-off also applies on death, or if you become permanently unfit to work. Nothing is inherited by your estate.

Plan 5's forty-year term is the change most worth understanding. Combined with a lower £25,000 threshold, it means a much larger share of graduates will repay for their entire working life rather than reaching write-off with a balance outstanding. For that cohort the loan behaves much more like an ordinary debt, and much less like a graduate tax.

Should you overpay?

Usually not, and the reason is the write-off. If your balance and salary trajectory mean you will never clear the loan before it is written off, every voluntary pound is simply money handed over for nothing — the balance would have been cancelled anyway.

Overpaying makes sense only if you are confident you will clear the balance well before write-off, which in practice means a small balance, a high salary, or both. If you are close to that line, the arithmetic is worth doing properly rather than guessing, and a fee-free adviser is a better guide than a rule of thumb.

Pensions reduce repayments — sometimes

If you contribute to a pension through salary sacrifice, your gross pay falls, and student loan repayments are calculated on the reduced figure. Sacrificing 5% of a £40,000 salary on Plan 2 cuts the repayment from £955.35 to £775.35.

A relief-at-source pension does not do this, because your gross pay is unchanged. If your employer offers both, that difference is worth knowing — see Salary Sacrifice Explained.

See it against your own salary

Our salary calculator includes every plan, so you can see the repayment alongside your income tax, National Insurance and pension rather than in isolation. Switching between plans on the same salary is the quickest way to see how much the plan alone is worth.