Student Loan Repayments Explained: Plans 1, 2, 4 & 5 (2025-26)
Student loan repayments are collected automatically through PAYE. You only repay when your income exceeds the threshold for your plan — and the loan is eventually written off even if not fully repaid.
How Student Loan Repayments Work
Student loan repayments in the UK are collected through the PAYE system — just like income tax and National Insurance. Your employer deducts repayments automatically from your gross pay each month and sends them to HMRC, who pass them to the Student Loans Company. You do not need to arrange repayments yourself.
The key principle: you only repay when your income exceeds your plan's repayment threshold. If your income drops below the threshold at any point — whether due to redundancy, career breaks, or part-time work — repayments pause automatically. You are never chased for minimum payments as you would be with a bank loan.
Repayment Thresholds and Rates 2025-26
| Plan | Who It Applies To | Threshold (Annual) | Rate |
|---|---|---|---|
| Plan 1 | Started uni before September 2012 (England/Wales); Northern Ireland | £24,990 | 9% |
| Plan 2 | Started uni September 2012–July 2023 (England/Wales) | £27,295 | 9% |
| Plan 4 | Scotland (all start dates) | £31,395 | 9% |
| Plan 5 | Started uni August 2023 onwards (England) | £25,000 | 9% |
| Postgraduate Loan | Postgraduate Master's or Doctoral loan (England/Wales) | £21,000 | 6% |
Worked Example: Plan 2 at £35,000
Salary: £35,000. Plan 2 threshold: £27,295.
- Income above threshold: £35,000 − £27,295 = £7,705
- Annual repayment: £7,705 × 9% = £693
- Monthly repayment: £693 ÷ 12 = £57.75
This comes directly off your take-home pay — it appears on your payslip alongside income tax and NI. Your tax code and NI are calculated on your full gross salary, not after student loan deductions.
Multiple Loan Plans
If you have both an undergraduate plan (Plan 1, 2, 4, or 5) and a Postgraduate Loan, both are deducted on the same payslip. The two deductions are calculated independently — 9% above your undergraduate threshold plus 6% above the £21,000 Postgraduate threshold — and both appear as separate lines on your payslip.
When Is the Loan Written Off?
| Plan | Write-Off Trigger |
|---|---|
| Plan 1 | Age 65, or 25 years after the April you became eligible to repay |
| Plan 2 | 30 years after the April you became eligible to repay |
| Plan 4 | 30 years after the April you became eligible to repay |
| Plan 5 | 40 years after the April you became eligible to repay |
| Postgraduate | 30 years after the April following graduation |
Many Plan 2 borrowers are projected never to fully repay their loans within the 30-year window, meaning the balance is written off at no further cost to them. This makes the student loan function more like a graduate tax than a conventional loan for lower and middle earners.
Frequently Asked Questions
How much do I repay per month on my student loan?
You repay 9% of income above your threshold. For Plan 2 at £35,000: (£35,000 − £27,295) × 9% = £693/year = £58/month. Use our student loan calculator for precise figures across all plans.
When does my student loan get written off?
Plan 2 is written off after 30 years. Plan 5 after 40 years. Plan 1 after 25 years or at age 65. Plan 4 after 30 years. Postgraduate Loans after 30 years from the April following graduation.
Does my student loan affect my credit score?
No. UK student loans do not appear on your credit file. Mortgage lenders may ask about them in affordability checks since repayments reduce your disposable income, but the loan itself is not a credit file entry.