UK student loan repayments are a percentage of income above a plan-specific threshold. They are not like a typical bank loan with a fixed monthly bill — if your income drops below the threshold, repayments stop.
How it’s worked out
For each plan you select:
Annual repayment = (annual income − threshold) × rate, or £0 if income is below the threshold.
Undergraduate plans (1, 2, 4 and 5) use a 9% rate. Postgraduate loans use 6%. If you have both, employers usually deduct both.
2026/27 thresholds
| Plan | Annual threshold | Rate |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate | £21,000 | 6% |
Worked example
Income £40,000 on Plan 2: (£40,000 − £29,385) × 9% = £955.35 a year (about £79.61 a month).
Same income with Plan 2 and a postgraduate loan: £955.35 + (£40,000 − £21,000) × 6% = £2,095.35 a year.
Frequently asked questions
How are student loan repayments calculated?
You repay a percentage of income above your plan’s threshold. Undergraduate plans repay 9%; postgraduate loans repay 6%. Below the threshold, repayments are £0.
Which student loan plan am I on?
Plan 1 covers older English/Welsh and all Northern Irish undergraduate loans. Plan 2 covers English/Welsh loans from 2012. Plan 4 is for Scottish loans. Plan 5 covers new English undergraduate loans from August 2023. Postgraduate loans are separate and can be repaid alongside an undergraduate plan.
Do student loan repayments affect my tax code?
No. Student loans are deducted through PAYE (or Self Assessment) separately from Income Tax and National Insurance.
Sources
- Income Tax rates and Personal Allowance (checked 5 October 2026)
- Scottish Income Tax rates (checked 5 October 2026)
- Rates and thresholds for employers 2026 to 2027 (checked 5 October 2026)
- National Insurance: how much you pay (checked 5 October 2026)
- National Insurance rates and categories (checked 5 October 2026)
- 2026 to 2027: Student and Postgraduate Loan deduction tables (checked 5 October 2026)
- Tax on dividends (checked 5 October 2026)
- Corporation Tax rates and allowances (checked 5 October 2026)
- Income Tax — changes to tax rates for property, savings and dividend income (checked 5 October 2026)