One of the most reassuring facts about UK student loans rarely gets mentioned upfront: for most graduates, repayment works far more like an additional tax on income above a certain level than like a conventional debt that must be repaid in full. Understanding exactly how the system works helps replace anxiety with a realistic picture of what to actually expect.
This guide explains the different repayment plans, when repayments start, and whether voluntary overpayments genuinely make financial sense.
Which Repayment Plan Are You On?
Which plan applies to you depends on when and where you studied, not on your income or circumstances.
| Plan | Typically Applies To | 2026/27 Threshold | Repayment Rate |
|---|---|---|---|
| Plan 1 | Most English and Welsh students starting before 2012 | £26,900 | 9% above threshold |
| Plan 2 | Most English and Welsh students starting 2012 to 2023 | £29,385 | 9% above threshold |
| Plan 4 | Scottish students | £33,795 | 9% above threshold |
| Plan 5 | Most English students starting from 2023 onwards | £25,000 | 9% above threshold |
| Postgraduate Loan | Master’s and doctoral loan borrowers | £21,000 | 6% above threshold |
If you are unsure which plan applies to you, your Student Loans Company online account will confirm it clearly.
When Do Repayments Actually Start?
You only start repaying once you have left your course and your income rises above your plan’s threshold. Below that threshold, no repayments are taken at all, regardless of your outstanding balance. Repayments are collected automatically:
- Through PAYE if you are employed, deducted directly from your salary alongside tax and National Insurance.
- Through Self Assessment if you are self-employed, calculated as part of your annual tax return.
If your income drops below the threshold at any point, for example between jobs, repayments pause automatically without any action needed on your part.
How Much Will You Actually Repay?
Repayments are calculated purely on income above the threshold, not on your total loan balance. For example, someone on Plan 2 earning £35,000 a year would repay 9% of the amount above the £29,385 threshold, working out to a relatively modest monthly deduction rather than a large fixed payment.
If you hold loans under two different undergraduate plans simultaneously, you make a single repayment calculated using whichever threshold is lower, rather than two separate deductions. Postgraduate loans, however, are calculated entirely separately, so someone with both an undergraduate and a postgraduate loan could see a combined 15% deducted above their respective thresholds.
When Is the Loan Written Off?
Every plan has a fixed write-off period, after which any remaining balance is cancelled entirely, regardless of how much you originally borrowed.
- Plan 1: Written off 25 years after the April you were first due to repay.
- Plan 2: Written off 30 years after the April you were first due to repay.
- Plan 5: Written off 40 years after the April you were first due to repay.
- Postgraduate Loan: Typically written off 30 years after becoming due for repayment.
Because of these long write-off periods combined with income-based repayment, a substantial proportion of borrowers, particularly on Plan 2, never repay their loan in full before it is cancelled.
Should You Make Voluntary Overpayments?
This is one of the most common questions graduates ask, and the honest answer depends heavily on your specific plan and expected future earnings.
- Overpaying rarely makes sense if you are unlikely to repay the full balance before the write-off date anyway, since any amount you overpay beyond what you would have repaid regardless is simply money you will not get back.
- Overpaying may be worthwhile if you have a relatively small remaining balance, expect high future earnings, and are on track to repay in full well before your write-off date, where clearing the balance early can reduce total interest paid.
Because voluntary overpayments to the Student Loans Company are not refundable, it is worth modelling your own likely repayment trajectory carefully before making a large lump-sum payment.
Avoiding Common Overpayment Mistakes
- Continuing full PAYE deductions after your loan is technically close to cleared, since a delay between deductions and the Student Loans Company updating your balance can lead to unnecessary overpayment
- Being on the wrong plan type by mistake, which can be checked directly with the Student Loans Company using your payslip details
- Not requesting a refund for confirmed overpayments, which the Student Loans Company will process once you provide the relevant evidence
Frequently Asked Questions
What Happens If You Move Abroad?
Moving abroad does not cancel your loan or pause the write-off countdown, but it does change how repayments are worked out. If you plan to live outside the UK for more than three months, you must tell the Student Loans Company before you leave and complete an Overseas Income Assessment.
- Threshold changes by country: Overseas repayment thresholds are adjusted to reflect the cost of living in the country you move to, so they are rarely identical to the UK figure.
- Assessment runs annually: Your overseas income assessment typically lasts 12 months, after which the Student Loans Company will ask you to reassess.
- Missing the update has consequences: Failing to inform the Student Loans Company can lead to a higher interest rate being applied or repayment arrears building up.
- Write-off dates are unaffected: Your loan’s original write-off date stays the same regardless of where you live in the meantime.
Managing Your Loan Online
You can check your current balance, repayment plan and progress at any time by logging into your Student Loans Company online account, which also lets you update your address, employment details, and request an official repayment or overseas assessment. The official gov.uk student finance repayment calculator can also give you a personalised estimate based on your specific plan and expected income.
Frequently Asked Questions
How much would I repay on a £35,000 salary?
On Plan 2, with a threshold of £29,385, you would repay 9% of the £5,615 above the threshold, working out to roughly £42 a month, though the exact figure depends on your specific plan and pay frequency.
Does my student loan get wiped after 30 years?
Plan 2 loans are written off 30 years after the April you were first due to repay, while Plan 1 is written off after 25 years and Plan 5 after 40 years, regardless of the remaining balance.
What happens to my student loan if I move abroad?
You must notify the Student Loans Company before leaving if you will be away for more than three months, after which your repayments are reassessed against a country-specific threshold rather than the standard UK figure.
Does getting married affect my student loan repayments?
No. Student loan repayments are assessed on your own individual income only, so a partner’s earnings, whether or not you are married, have no effect on how much you repay.
How do I know which student loan plan I am on?
Your Student Loans Company online account confirms your specific plan, or you can generally infer it from when and where you started your course.
What happens if my income drops below the threshold?
Repayments pause automatically without any action required, and resume automatically once your income rises above the threshold again.
Is it worth overpaying my student loan?
This depends on whether you are likely to repay the balance in full before your plan’s write-off date; if not, overpaying generally hands over money that would otherwise have been cancelled anyway.
Do student loan repayments affect my credit score?
No. UK student loans do not appear on standard credit reports and do not affect your credit score, unlike most other forms of borrowing.
Understanding your specific repayment plan and threshold turns a vague, worrying figure into something concrete and manageable. If you are still weighing up how much to borrow in the first place, our student finance guide covers loans, grants and the application process in full.
