🎓 Student Loan Decoder
Plan 1? Plan 2? Doesn't matter — we'll decode exactly what your loan costs you.
On £35,000 with a £45,000 Plan 2 loan
£42/mo
Never cleared — about £134,662 written off after 30 years
You repay 9% of everything you earn above your plan threshold (6% on a Postgraduate Loan), whatever your balance. For 2026-27 those thresholds are Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000, Postgraduate Loan £21,000. Interest is reset every 1 September from the previous March RPI, which the Department for Education confirmed on 10 August 2026 as 4.1% for 1 September 2026 to 31 August 2027. Nothing is deducted in a period when your income sits below the threshold, and the balance is written off after 25 to 40 years depending on plan — which is why, for many graduates, this behaves more like a graduate tax than a debt.
| Plan | Threshold | Rate | Interest |
|---|---|---|---|
| Plan 1 | £26,900 | 9% | 4.1% |
| Plan 2 | £29,385 | 9% | 6.0% |
| Plan 4 | £33,795 | 9% | 4.1% |
| Plan 5 | £25,000 | 9% | 4.1% |
| Postgraduate Loan | £21,000 | 6% | 6.0% |
Interest applies from 1 September 2026. Plan 2 and Postgraduate Loan interest varies with income between RPI and RPI plus 3% but is capped at 6% for 1 September 2026 to 31 August 2027; the projection above uses that cap, so it is the worst case. Plan 4 is not named in the 10 August 2026 announcement — 4.1% is its published rule (the lower of RPI and base rate plus 1%) applied to that RPI figure.
Already announced for the following year: the Plan 1 threshold rises to £28,005 from 6 April 2027, and Plan 2 stays frozen at £29,385 through to 2029-30.
Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000 — all repaid at 9% of income above the threshold. The Postgraduate Loan threshold is £21,000 at 6%, and it stacks on top of an undergraduate plan. Plan 1 covers pre-Sep-2012 English and Welsh loans plus all Northern Ireland loans; Plan 2 covers Sep 2012 to Aug 2023 in England and Wales; Plan 4 is for Scottish students funded by SAAS; Plan 5 is England from Sep 2023. Source: GOV.UK, Repaying your student loan.
Repayments start the April after you finish or leave your course, but only once your income exceeds the plan threshold. For Plan 2 that is £29,385 a year (£2,448 a month) in 2026-27. If your income drops below the threshold, repayments automatically stop — nothing is owed for that period.
Yes, and the written-off amount is not taxed. Plan 1: 25 years after the April you were first due to repay if your first loan was on or after 1 September 2006, or at age 65 for older loans. Plan 2: 30 years. Plan 4: 30 years after the April you were first due to repay for loans from 1 August 2007; older Scottish loans are written off at 65 or after 30 years, whichever comes first. Plan 5: 40 years. Postgraduate Loan: 30 years in England and Wales.
Interest is reset each 1 September using the previous March RPI. The Department for Education announced on 10 August 2026 that RPI is 4.1% for 1 September 2026 to 31 August 2027. That makes Plan 1 4.1% and Plan 5 4.1%, while Plan 2 and Postgraduate Loans are capped at 6% for the period (they would otherwise run to RPI plus 3%). Plan 4 is not named in that announcement, but its published rule is the lower of RPI and the Bank of England base rate plus 1%, which is 4.1% against a 3.75% base rate. Plan 2 interest varies with income between RPI and the cap, so the 6% used in this projection is the worst case.
Usually no, unless you are close to clearing it anyway. Repayments only happen above the threshold, the balance is written off after 25 to 40 years depending on plan, and the interest rate is capped. If the projection above shows most of your balance being written off, voluntary overpayments are money you would never otherwise have paid. This is general information, not financial advice.
9% of income above the threshold is deducted through PAYE, in the same way as tax and National Insurance. For Plan 2 on a £40,000 salary: (£40,000 − £29,385) × 9% = £955 a year, or £80 a month. Because it is a percentage of income above a threshold rather than of the balance, the size of your loan makes no difference to the monthly deduction.
Yes, for Plan 1. The Department for Education confirmed on 10 August 2026 that the Plan 1 repayment threshold rises to £28,005 from 6 April 2027 to 5 April 2028. Plan 2 is frozen at £29,385 from 2027-28 through to 2029-30, announced at Budget 2025 — a freeze means more of your income falls above the threshold each year as pay rises, so the amount deducted goes up even though the rate does not.
Last updated: August 2026. Sources: GOV.UK, Repaying your student loan (thresholds, interest and write-off rules); Department for Education, Student Loans Interest Rates and Repayment Threshold Announcement, 10 August 2026 (RPI 4.1% and the 2027-28 Plan 1 threshold); Budget 2025 (the Plan 2 threshold freeze). Educational tool, not financial advice.
Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000 — all repaid at 9% of income above the threshold. The Postgraduate Loan threshold is £21,000 at 6%, and it stacks on top of an undergraduate plan.
Plan 1 covers pre-Sep-2012 English and Welsh loans plus all Northern Ireland loans; Plan 2 covers Sep 2012 to Aug 2023 in England and Wales; Plan 4 is for Scottish students funded by SAAS; Plan 5 is England from Sep 2023. Source: GOV.UK, Repaying your student loan.
Repayments start the April after you finish or leave your course, but only once your income exceeds the plan threshold. For Plan 2 that is £29,385 a year (£2,448 a month) in 2026-27.
If your income drops below the threshold, repayments automatically stop — nothing is owed for that period.
Yes, and the written-off amount is not taxed. Plan 1: 25 years after the April you were first due to repay if your first loan was on or after 1 September 2006, or at age 65 for older loans.
Plan 2: 30 years. Plan 4: 30 years after the April you were first due to repay for loans from 1 August 2007; older Scottish loans are written off at 65 or after 30 years, whichever comes first.
Plan 5: 40 years. Postgraduate Loan: 30 years in England and Wales.
Interest is reset each 1 September using the previous March RPI. The Department for Education announced on 10 August 2026 that RPI is 4.1% for 1 September 2026 to 31 August 2027.
That makes Plan 1 4.1% and Plan 5 4.1%, while Plan 2 and Postgraduate Loans are capped at 6% for the period (they would otherwise run to RPI plus 3%). Plan 4 is not named in that announcement, but its published rule is the lower of RPI and the Bank of England base rate plus 1%, which is 4.1% against a 3.75% base rate.
Plan 2 interest varies with income between RPI and the cap, so the 6% used in this projection is the worst case.
Usually no, unless you are close to clearing it anyway. Repayments only happen above the threshold, the balance is written off after 25 to 40 years depending on plan, and the interest rate is capped.
If the projection above shows most of your balance being written off, voluntary overpayments are money you would never otherwise have paid. This is general information, not financial advice.
9% of income above the threshold is deducted through PAYE, in the same way as tax and National Insurance. For Plan 2 on a £40,000 salary: (£40,000 − £29,385) × 9% = £955 a year, or £80 a month.
Because it is a percentage of income above a threshold rather than of the balance, the size of your loan makes no difference to the monthly deduction.
Yes, for Plan 1. The Department for Education confirmed on 10 August 2026 that the Plan 1 repayment threshold rises to £28,005 from 6 April 2027 to 5 April 2028.
Plan 2 is frozen at £29,385 from 2027-28 through to 2029-30, announced at Budget 2025 — a freeze means more of your income falls above the threshold each year as pay rises, so the amount deducted goes up even though the rate does not.
