Student loan repayment in the UK is income-contingent: you repay 9% of what you earn above your plan's threshold — 6% on a Postgraduate Loan — and only while your income is above that threshold. In the 2026/27 tax year the thresholds are £26,900 on Plan 1, £29,385 on Plan 2, £33,795 on Plan 4 and £25,000 on Plan 5, with the Postgraduate Loan threshold at £21,000. Repayments are usually taken automatically from your pay, stop if your income falls below the threshold, and any balance left is written off after a set number of years.

This guide explains which plan you are on, the current thresholds and rates, worked examples of what you actually pay, how interest works, what happens if you move abroad, when the loan is written off, and whether overpaying makes sense. Thresholds change each April, so check GOV.UK for the tax year you are looking at.

Which plan are you on?

Your plan depends on where you studied and when you started your course. There are five:

If you are not sure which plan you are on, the fastest way to find out is to sign in to your Student Loans Company online account and check your active plan type. Your payslip should also show your student loan plan, and your employer can check it from your starter information or from the start notice HMRC sends them. Your plan never changes: it is fixed by when and where you studied, even if you move to another part of the UK.

The 2026/27 thresholds and rates

For the tax year running from 6 April 2026 to 5 April 2027, the thresholds published by GOV.UK are:

The key point is that you repay a percentage of the income above the threshold, not of your whole salary. Nothing is due on the income below the threshold, and repayments stop automatically if your income drops below it. The size of your loan does not change the monthly amount: someone who borrowed £20,000 and someone who borrowed £60,000 on the same plan and the same salary pay exactly the same each month.

If you have two undergraduate-style plans, for example Plan 1 and Plan 2, you repay 9% of the income above the lowest of the two thresholds. If you have an undergraduate plan and a Postgraduate Loan, you repay both at the same time: 9% above your undergraduate threshold and 6% above the £21,000 postgraduate threshold.

Worked examples: what you actually pay

Take a Plan 2 graduate earning £35,000 a year. The amount above the £29,385 threshold is £5,615. Nine per cent of that is £505.35 a year, or about £42 a month. On a salary of £30,000, the same graduate would pay 9% of £615 — £55.35 a year, or under £5 a month.

Take a Plan 5 graduate earning £30,000 a year. The Plan 5 threshold is £25,000, so the amount above it is £5,000. Nine per cent is £450 a year, or £37.50 a month. A Plan 5 graduate earning £25,000 or less pays nothing at all.

Take a postgraduate borrower earning £30,000 a year. The Postgraduate Loan threshold is £21,000, so 6% of the £9,000 above it is £540 a year, or £45 a month. If that borrower also has an undergraduate Plan 2 loan, both deductions apply: about £42 a month for the undergraduate loan and £45 a month for the postgraduate loan, £87 a month in total.

These are the deductions for a steady salary. Because payroll works out each pay period separately, a bonus or overtime in one month can push that month's pay over the monthly threshold and trigger a deduction even if your annual salary is close to the threshold. If your income for the whole tax year turns out to have been below your plan's yearly threshold, you can ask the Student Loans Company for a refund.

When repayments start and how they are taken

Repayments start from the April after you leave your course, and only once your income is above your plan's threshold. If you are employed, your employer takes the repayment from your pay through PAYE, alongside tax and National Insurance, using the plan type shown on your starter checklist, your P45, or the start notice HMRC sends them. If your employer does not know your plan type, GOV.UK employer guidance says they should use Plan 5 until the start notice arrives — and they must not make deductions in arrears.

If you are self-employed, student loan repayments are calculated through Self Assessment on your tax return. If you have more than one job, each employer works out deductions on the earnings from that job alone and ignores what you earn elsewhere. Your employer cannot stop deductions because you ask them to: they stop only when HMRC sends a stop notice, which happens when the loan is repaid in full or written off.

How interest works

Interest is charged from the day the first payment is made to you or your university until the loan is repaid in full, and it is added to the balance. The rate depends on your plan. On Plans 1, 4 and 5 it is the lower of the Retail Prices Index (RPI) or the Bank Rate plus 1% — 4.1% from September 2026, when RPI was the lower figure. On Plan 5 it is RPI only. On Plan 2, the rate after you leave your course is 4.1% (RPI) on income of £29,385 or less, rising on a sliding scale towards RPI plus 3% (7.1%) at income of £52,885, capped at 6% between 1 September 2026 and 31 August 2027. On a Postgraduate Loan the rate is RPI plus 3%, also currently capped at 6%.

Because interest is charged on the whole balance while repayments are only 9% of the income above the threshold, the balance can grow even while you are paying — particularly for Plan 2 borrowers in the first years after graduation. That is normal, and it is why the write-off rules below matter so much: for many borrowers, the monthly payment is the whole story, and the balance itself is never fully repaid.

What happens if you move abroad?

Moving overseas does not cancel your obligation. You must tell the Student Loans Company if you are leaving the UK for more than three months. The SLC sets your repayments using a threshold for the country you live in, adjusted for local price levels, so it can differ significantly from the UK figure, and you pay the SLC directly rather than through an overseas payroll.

You are expected to keep repaying unless you can prove your overseas income is below the threshold for that country. GOV.UK warns that if you do not keep the SLC up to date, you may be charged a higher interest rate or build up arrears. The rules and the overseas income assessment form are on GOV.UK, under repaying your student loan.

When is the loan written off?

Whatever is left of the loan is written off after a set period, which depends on your plan:

The loan is also cancelled if you die, and the Student Loans Company may cancel it if you can no longer work because of illness or disability. Bankruptcy does not write off a student loan in the UK. The Department for Education forecasts that 55% of full-time students who started in 2025/26 will repay their loans in full, against 32% of the last Plan 2 cohort who started in 2022/23 — which means most Plan 2 borrowers will never repay in full, and for them the loan works much more like a graduate tax than a conventional debt.

Should you overpay?

This is the question that matters more than which plan you are on. If your realistic lifetime earnings will not clear the balance before write-off, overpaying is wasted money, because the balance would have been written off anyway. Government forecasts suggest this applies to most Plan 2 borrowers. With its 40-year term and lower threshold, Plan 5 is expected to be repaid in full by a small majority, so the answer depends much more on your own earnings.

If you will clear the loan within the write-off window, overpaying can save money on interest, and the higher the interest rate the more it makes sense. Even then, tax-relieved alternatives often beat loan overpayment: a workplace pension with an employer match, ISA contributions, or mortgage overpayment can be worth more than the interest saved. You can make voluntary extra payments to the Student Loans Company at any time, and you can check your balance in your SLC online account before deciding.

Common misunderstandings

It affects my credit rating. No. Student loan repayment is collected through PAYE and does not appear on credit files in the UK, so it does not directly affect your credit score.

It affects my mortgage application. Partly. Lenders see the monthly repayment as a deduction from your disposable income, which can reduce how much they will lend. They do not worry about the underlying balance itself.

My partner's income counts. No. The threshold applies to your income alone. A spouse's income does not count, and salary sacrifice into a pension does reduce the earnings used for student loan deductions, which can cut the repayment by £9 for every £100 sacrificed above the threshold.

I should pay it off as fast as possible. Not necessarily. See the overpayment section above: if the balance would be written off anyway, extra payments buy you nothing.

Frequently asked questions

Do I repay anything if I earn below my threshold? No. Nothing is due, and repayments stop automatically if your income falls below the threshold, whether that is because of a pay cut, fewer hours, or a period out of work.

What if I never earn above the threshold? You never repay anything, and the loan is written off when your plan's write-off period ends. No debt collector will pursue it and it does not become a court debt.

Can I repay early? Yes. You can make voluntary payments to the Student Loans Company on top of the PAYE deductions, at any time and in any amount.

What if my employer takes too much? If deductions were taken when your income for the tax year was below the threshold, or the wrong plan was used, ask the Student Loans Company for a refund. Your employer can only refund over-deductions within the current tax year.

Does the loan affect my State Pension? No. Student loans and the State Pension are unconnected, and repayments do not reduce your National Insurance record.

Student loan repayment is designed to track your earnings: 9% of what you earn above the threshold, nothing below it, collected automatically, and written off after 25, 30 or 40 years depending on your plan. The monthly figure is usually small — tens of pounds, not hundreds — and for most borrowers the balance is never the number that matters. What matters is your plan, your threshold, and whether your earnings are likely to clear the loan before write-off. Check both on GOV.UK and in your Student Loans Company account, and check them again each April, when the thresholds change.