TL;DR
UK postgraduate students are carrying double debt burdens -- undergraduate student loans on top of postgraduate loans -- with many reporting they feel financially trapped. Postgraduate loan debt averages £18,000 to £25,000 on top of undergraduate balances that can exceed £50,000 for those who started from 2012 onwards. Postgraduate loans are repaid under Plan 3, with a lower repayment threshold than Plan 2 undergraduate loans and no write-off until age 65.
Last reviewed: 27 June 2026 | Sources: GOV.UK, Student Loans Company, legislation.gov.uk
|
Key Facts Postgraduate loan max: £13,348 (2026/27)Repayment threshold (Plan 3): £21,000/yearRepayment rate: 6% above thresholdWrite-off age: 65 (Plan 3) |
The double debt problem
UK graduates who took out postgraduate loans after 2016 are carrying two separate student loan debts with two separate repayment plans, each deducted from their salary above different thresholds. Postgraduates describe feeling financially trapped, with combined monthly repayments reducing take-home pay significantly in a period of high housing costs and elevated inflation.
Undergraduate loans taken out from 2012 to 2023 are repaid under Plan 2, with a repayment threshold of £27,295 per year in 2026/27 and repayments at 9 percent of income above the threshold. The write-off period for Plan 2 loans is 30 years from the April after graduation. Postgraduate loans taken out from 2016 are repaid under Plan 3, with a lower threshold of £21,000 per year and repayments at 6 percent of income above the threshold. Plan 3 loans are not written off until age 65.
How repayments stack up
A postgraduate earning £35,000 per year pays both Plan 2 and Plan 3 repayments simultaneously. Under Plan 2, they repay 9 percent of income above £27,295, which is 9 percent of £7,705, equalling approximately £693 per year or £58 per month. Under Plan 3, they repay 6 percent of income above £21,000, which is 6 percent of £14,000, equalling £840 per year or £70 per month. Total student loan deductions: approximately £128 per month, on top of income tax and National Insurance. At £45,000 income, the combined monthly deduction rises to approximately £220 per month.
Postgraduate loan balances accrue interest at RPI plus 3 percent while studying and while earning above the threshold. Given that postgraduate degrees often lead to higher-earning careers in law, medicine, academia and business, many postgraduates will repay the full balance rather than having it written off -- meaning the total cost significantly exceeds the amount borrowed.
Postgraduate loan amounts and eligibility
The maximum postgraduate loan for a Master's degree in 2026/27 is £13,348, available as a single payment or in three instalments. The loan is available to UK nationals and those with settled status who are under 60 at the start of the course. It is not means-tested and does not depend on household income. Doctoral loans are available separately up to £29,390 for PhD and other doctoral programmes. The loans are administered by the Student Loans Company and repayment begins in April after graduation or when income exceeds £21,000, whichever is later.
Options for managing postgraduate loan debt
Voluntary overpayments on Plan 3 loans reduce the balance and future interest accrual, but given the age-65 write-off for those who do not repay in full, voluntary overpayments are not always financially rational. MoneyHelper's student loan repayment calculator can model the total lifetime cost of repayment versus letting the loan run. For postgraduates whose careers are likely to generate high lifetime earnings, earlier repayment reduces total interest. For those in lower-earning careers who are unlikely to repay the full balance, making only mandatory repayments and allowing the loan to be written off at 65 may cost less overall.
|
Related Guides |
|
Disclaimer This article is for information only and does not constitute financial, tax or legal advice. Kael Tripton Ltd is an independent editorial publisher and is not regulated by the FCA. |
Frequently asked questions
What is the postgraduate loan repayment threshold?
The Plan 3 postgraduate loan repayment threshold is £21,000 per year in 2026/27. Repayments are 6 percent of income above this threshold, deducted automatically through PAYE for employees. This is lower than the Plan 2 undergraduate threshold of £27,295, meaning postgraduates start repaying sooner.
Can I have both Plan 2 and Plan 3 repayments deducted at the same time?
Yes. If you have both an undergraduate (Plan 2) and a postgraduate (Plan 3) loan, both repayments are deducted simultaneously from your salary through PAYE once you earn above the respective thresholds. The deductions are separate and calculated independently on your income above each threshold.
When are postgraduate loans written off?
Plan 3 postgraduate loans are written off when you reach age 65, regardless of how much remains outstanding. This differs from Plan 2 undergraduate loans, which are written off 30 years after the April following graduation. For most postgraduates, the Plan 3 write-off at 65 is the relevant horizon rather than full repayment.
Should I make voluntary overpayments on my postgraduate loan?
Whether to make voluntary overpayments depends on your expected lifetime earnings. If you are likely to repay the full balance before age 65 based on your salary trajectory, making overpayments reduces total interest. If you are unlikely to repay the full balance, voluntary overpayments may not reduce the total amount you pay over your lifetime. Use the MoneyHelper student loan calculator to model your specific situation.
What is the maximum postgraduate loan available?
The maximum postgraduate Master's loan for 2026/27 is £13,348. This is not means-tested and is available regardless of household income. Doctoral loans are available separately up to £29,390. Both are administered by the Student Loans Company and repaid under Plan 3.
|
Sources Student Loans Company: Postgraduate Loans |
