UK student loans work very differently from commercial debt. Repayments are income-contingent — you only repay when you earn above a threshold — and any remaining balance is written off after a set number of years. This makes the decision to overpay or repay early more nuanced than it first appears.
How UK Student Loan Repayment Works
Repayments are collected automatically through the PAYE system (via your employer) or through self-assessment if you are self-employed. You never need to make a manual payment unless you choose to.
Repayment Thresholds 2026/27
| Plan | Who it applies to | Annual threshold | Repayment rate |
|---|---|---|---|
| Plan 1 | Scotland/NI graduates; England/Wales pre-2012 | £24,990 | 9% above threshold |
| Plan 2 | England/Wales graduates 2012–2023 | £28,470 | 9% above threshold |
| Plan 5 | England/Wales from 2023/24 onwards | £25,000 | 9% above threshold |
| Postgraduate Loan | Master’s and Doctoral loans | £21,000 | 6% above threshold |
Worked example: On a salary of £35,000 with a Plan 2 loan, you repay 9% of (£35,000 − £28,470) = 9% of £6,530 = £587 per year (£48.92/month). If your salary drops below £28,470, repayments stop automatically.
Write-Off Periods
| Plan | Written off after |
|---|---|
| Plan 1 | 25 years, or age 65 (whichever comes first) |
| Plan 2 | 30 years from April after first repayment |
| Plan 5 | 40 years from April after first repayment |
| Postgraduate Loan | 30 years from April after first repayment |
Most graduates with Plan 2 or Plan 5 loans will never fully repay — meaning early voluntary payments reduce the amount written off, not the total you pay.
Articles in This Cluster
| Article | What it covers |
|---|---|
| Student Loan Repayment Guide | How repayment works, plans, PAYE deductions, self-employment |
| Student Loan Thresholds 2027/28 | Updated thresholds for all plans from April 2027 |
| Is It Worth Paying Off Your Student Loan Early? | The maths behind early repayment — when it helps and when it doesn’t |