TL;DR
You repay a UK student loan only on income above the threshold for your plan, at 9 percent for undergraduate plans and 6 percent for a postgraduate loan. For 2026/27 the thresholds are Plan 1 26,900 pounds, Plan 2 29,385 pounds, Plan 4 33,795 pounds, Plan 5 25,000 pounds and Postgraduate 21,000 pounds. Repayments are taken automatically through PAYE and the balance is written off after the plan period.
Last reviewed: June 2026
| After graduation |
Key facts
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Repaying is income-based, not balance-based
A student loan does not behave like normal debt. You repay only when your income passes the threshold for your repayment plan, and you pay a set percentage of the amount above that threshold. If your income falls below the threshold, repayments stop automatically and restart only when you are over it again.
This is why the size of the balance matters far less day to day than your income. The monthly amount is driven by what you earn, not by how much you borrowed, which is why many people find the deduction smaller than they feared.
Your plan, your threshold for 2026/27
Which plan you are on depends on where in the UK you studied and when your course started. The plan sets the income threshold, the percentage, and the write-off date. The table below shows the confirmed 2026/27 thresholds. Because they are reviewed each year, check the current figure on gov.uk before relying on it.
If you hold more than one loan, for example an undergraduate plan and a postgraduate loan, each is assessed against its own threshold and they stack. A graduate with a Plan 2 and a Postgraduate loan repays 9 percent above 29,385 pounds plus 6 percent above 21,000 pounds.
| Plan | Who it covers | Threshold 2026/27 | Rate | Written off after |
|---|---|---|---|---|
| Plan 1 | Pre-Sept 2012 (England/Wales), Northern Ireland | 26,900 pounds | 9% | around 25 years |
| Plan 2 | England/Wales, Sept 2012 to July 2023 | 29,385 pounds | 9% | around 30 years |
| Plan 4 | Scotland | 33,795 pounds | 9% | around 30 years |
| Plan 5 | England, courses from Aug 2023 | 25,000 pounds | 9% | around 40 years |
| Postgraduate | Master's and Doctoral loans | 21,000 pounds | 6% | around 30 years |
Thresholds confirmed for the 2026/27 tax year. Write-off periods depend on when you borrowed. Verify on gov.uk.
How repayments are collected
If you are an employee, repayments are taken automatically through PAYE alongside tax and National Insurance and appear on your payslip. Your employer deducts the right amount based on your plan and earnings, so you do not arrange anything. The self-employed repay through Self Assessment instead.
Because the deduction is assessed per pay period, a one-off bonus month can trigger a repayment even if your annual income is modest. If your annual income ends up below the threshold despite that, you can ask the Student Loans Company for a refund, though it is not automatic.
Interest, write-off and whether to overpay
Interest is added to the balance at a rate that depends on your plan, but because repayment is income-based and the balance is written off after the plan period, many borrowers never repay the full amount with interest before write-off. The headline interest rate therefore matters far less than on a conventional loan.
Overpaying clears the loan faster but only benefits you if you would otherwise have repaid the full balance before write-off. For many graduates the loan behaves more like a payroll deduction than a debt, so voluntary overpayment can simply hand money to the system for no gain. Model your own position before overpaying.
Related guides |
This guide is editorial information based on official UK public sources as at June 2026 and is not financial advice. Figures and thresholds change: confirm current details with the official source before acting. Thresholds shown are for the 2026/27 tax year and change annually. Kael Tripton Ltd is an independent publisher, is not regulated by the FCA, and takes no commission, quotes or lead fees on the products discussed. |
Frequently asked questions
When do I start repaying my student loan?
Only once your income passes the threshold for your plan. Repayments begin the April after you finish your course, and only if you earn above the threshold.
Is the repayment taken from my whole salary?
No. You repay a percentage of the income above the threshold only, so the deduction is smaller than people often expect.
What are the 2026/27 thresholds?
Plan 1 is 26,900 pounds, Plan 2 is 29,385 pounds, Plan 4 is 33,795 pounds, Plan 5 is 25,000 pounds, and Postgraduate is 21,000 pounds.
Should I overpay my loan?
Only if you would otherwise repay the full balance with interest before it is written off. For many graduates it behaves like a payroll deduction, so overpaying may not help.
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