Student Loan Repayment Thresholds 2026/27 — All Plan Types Explained

Student loan repayments are deducted automatically from your salary once you earn above your plan’s threshold. Here are all the rates and thresholds for 2026/27.

Unlike other debts, student loans don’t work like a traditional loan at all. You never receive a bill, there’s no risk to your credit score if you don’t repay early, and any balance left after 25–40 years (depending on your plan) is simply written off. Repayments are deducted through PAYE, just like tax and National Insurance — you only pay 9% on what you earn above the threshold, not on your whole salary.

The most important thing to understand is which plan you’re on. The five plan types have significantly different thresholds, interest rates, and write-off periods. Someone on Plan 4 (Scotland) pays nothing until £31,395; someone on Plan 1 starts repaying from £24,990. The difference matters: a £30,000 earner would pay £451 per year on Plan 1, £243 on Plan 2, and £0 on Plan 4.

Student Loan Repayment Thresholds 2026/27

Which Plan Are You On?

How to Check Your Plan

Monthly Repayments by Salary

Plan 1 (Threshold: £24,990)

Plan 2 (Threshold: £27,295)

Plan 4 — Scotland (Threshold: £31,395)

Plan 5 (Threshold: £25,000)

Postgraduate Loan (Threshold: £21,000)

Multiple Loans — How Repayments Work

If you have more than one type of loan, you pay both simultaneously:

Plan 2 + Postgraduate Loan

Plan 1 + Plan 2 (Changed Courses)

If you have both Plan 1 and Plan 2 loans (rare — changed course mid-way), the rules are complex. Usually you repay both concurrently once over the lower threshold.

Student Loan Interest Rates 2026/27

Student loan interest is charged from the day you take out the loan — even while you’re studying. For many graduates, the balance grows faster than they repay it in the early years of their career. This can feel alarming, but it’s important not to let it drive you into early repayments unless you’re genuinely likely to clear the balance before write-off. For most Plan 2 graduates on average earnings, around 80% of the original balance will be written off — every pound you paid extra was effectively wasted.

Plan 2 Interest Rate — Income-Based

Current RPI (as of early 2026): approximately 3.5%, so Plan 2 interest ranges from 3.5% to 6.5%.

When Are Student Loans Written Off?

Write-Off Examples

Should You Repay Early?

For most graduates, the answer is no — but it depends entirely on your likely lifetime earnings. If you won’t earn enough to repay your full balance before write-off, every voluntary overpayment is simply donating money to the government. If you will earn enough — typically high earners in well-paid professions — early repayment can save on interest.

The key question is: will you clear your balance? If you’re a high earner who took a small loan (say, £20,000) and is earning £70,000+, yes. If you’re on a median salary with a £50,000+ balance, almost certainly not.

Consider Voluntary Repayments If:

Don’t Overpay If:

The Numbers

Most Plan 2 graduates will not repay their loans in full before write-off. The IFS estimates:

Self-Employment and Student Loans

Self-employed people repay student loans through Self Assessment.

How It Works

Self-Employed Repayment Example

Employed + Self-Employed

If you have both employed and self-employed income:

You may end up paying less via PAYE but owing more via Self Assessment if combined income pushes you over the threshold.

Repaying While Abroad

Overseas Thresholds

SLC sets repayment thresholds based on living costs in your country. Some examples:

Key Changes for 2026/27

Common Questions

Can I Pause Repayments?

What If My Employer Deducts Too Much?

Does Student Loan Affect Mortgages?

Useful Links

• Self Assessment UK: Registration, Filing, Payments on Account and Penalties
• Student Loan Repayment Calculator
• Take-Home Pay Calculator
• Graduate Money Guide
• Self Assessment Guide