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Summary
UK student loan repayments are deducted automatically through PAYE at 9% of income above a plan-specific threshold. The repayment is not a fixed amount — it scales with your earnings. Most borrowers will have their remaining balance written off after 25-40 years depending on their plan, so the key question is not the total debt but the monthly repayment impact on take-home pay.
How it works
Repayment plans
| Plan | Who it covers | Threshold (2025-26) | Rate | Write-off |
|---|---|---|---|---|
| Plan 1 | England/Wales (pre-2012), NI | £26,065 | 9% | 25 years after April following graduation |
| Plan 2 | England/Wales (2012-2022) | £28,470 | 9% | 30 years after April following graduation |
| Plan 4 | Scotland | £32,745 | 9% | 30 years after April following graduation |
| Plan 5 | England (2023 onwards) | £25,000 | 9% | 40 years after graduation |
| Postgrad | Postgraduate loans | £21,000 | 6% | 30 years |
The calculation
Monthly repayment = (Gross monthly salary - Monthly threshold) x 9%
If your annual salary is below the threshold, you pay nothing. The repayment is collected through PAYE alongside income tax and National Insurance.
Interest rates
Interest accrues on the outstanding balance, but since most Plan 2 borrowers never fully repay, the interest rate often has no practical impact on the total amount repaid:
- Plan 1: Bank of England base rate + 1% (currently around 6.25%)
- Plan 2: RPI + up to 3% while studying, then RPI + 0-3% scaled by income (capped at prevailing rate)
- Plan 5: RPI only (no income-linked premium)
Multiple loans
If you have loans on more than one plan (e.g., Plan 2 undergraduate + postgraduate), both repayments are deducted simultaneously. Each applies its own threshold and rate independently.
Worked example
Salary: £35,000, Plan 2
- Annual income above threshold: £35,000 - £28,470 = £6,530
- Annual repayment: £6,530 x 9% = £587.70
- Monthly repayment: £587.70 / 12 = £48.98
- This reduces your monthly take-home pay by about £49 compared to someone without a student loan
Salary: £55,000, Plan 1 + Postgraduate
- Plan 1: (£55,000 - £26,065) x 9% = £2,604.15/year
- Postgrad: (£55,000 - £21,000) x 6% = £2,040/year
- Total annual: £4,644.15 (£387/month)
Inputs explained
- Gross salary — your annual salary before any deductions
- Loan plan — Plan 1, 2, 4, 5, or Postgraduate (check your payslip or Student Loans Company account)
- Tax year — thresholds change each April
Outputs explained
- Monthly repayment — the amount deducted from your pay each month
- Annual repayment — total repayments over the year
- Impact on take-home — shows how student loan repayments reduce your net pay alongside tax and NI
- Time to repay — estimate of how long until the loan is cleared (or written off)
Assumptions & limitations
- Repayments are calculated on gross salary from employment. Self-employment income is handled through Self Assessment with different timing.
- The calculator shows the repayment amount, not whether it is financially better to overpay. For most Plan 2 borrowers earning under ~£50,000, overpaying is not worthwhile because the balance will be written off.
- Salary sacrifice pension contributions reduce the income used to calculate student loan repayments, which can be beneficial.
- Thresholds typically increase each April. Plan 2’s threshold is frozen at £29,385 from 2026 until 2030.
- The write-off is not counted as income and does not attract a tax charge.