Student Loan Repayments Explained
How much comes out of your pay depends entirely on which repayment plan you're on, not how much you borrowed or still owe
If you took out a student loan to fund your studies, repayments come straight out of your pay through PAYE, automatically, the same way Income Tax and National Insurance do, with no bill or action needed from you. How much comes out depends entirely on which repayment plan you're on, not on how much you originally borrowed or how much you still owe. This page explains the different plans, how repayments are actually worked out, and how to check which one applies to you.
Which plan are you on?
This depends on where you were studying and when you started your course, not where you live or work now, and not what you studied.
| Plan | Who it's usually for |
|---|---|
| Plan 1 | England or Wales, started your course before 1 September 2012, or Northern Ireland, any start date |
| Plan 2 | England or Wales, started your course between 1 September 2012 and 31 July 2023 |
| Plan 4 | Scotland, any start date |
| Plan 5 | England, started your course on or after 1 August 2023 |
| Postgraduate Loan | A master's or doctoral loan is always on top of any plan above, never instead of it |
Wales hasn't adopted a Plan 5 equivalent. Welsh students who started after 1 September 2012 stay on Plan 2 regardless of start date, unlike their English counterparts.
How much you repay
Every plan works the same simple way: nothing at all below a threshold, then a flat percentage on everything you earn above it. There are no bands to work through, unlike Income Tax, just one threshold and one rate per plan.
| Plan | You start repaying above | Rate |
|---|---|---|
| Plan 1 | £26,900 a year | 9% |
| Plan 2 | £29,385 a year | 9% |
| Plan 4 | £33,795 a year | 9% |
| Plan 5 | £25,000 a year | 9% |
| Postgraduate Loan | £21,000 a year | 6% |
Like National Insurance, student loan repayments are worked out per pay period (usually per month), not cumulatively across the year the way Income Tax is, so someone with uneven pay across the year can end up repaying a slightly different total than someone earning the same annual amount spread evenly.
Worth being precise about: "below the threshold" genuinely means £0 repaid, not just a smaller amount, a common source of anxiety for recent graduates who assume repayments start the moment they begin working. See the recent graduate in Family & Household Examples, on £28,000 with a Plan 2 loan: still comfortably under the threshold, so nothing at all comes out of their pay yet.
Worked example: £35,000 salary on Plan 2
Say you earn £35,000 a year on Plan 2.
- Amount above the threshold: £35,000 − £29,385 = £5,615 a year
- This is worked out fresh each month, not once for the whole year: spread evenly, that's £467.92 above the threshold a month
- £467.92 × 9% = £42.11, rounded down to the nearest whole pound (gov.uk's own example rounds £45.81 down to £45), that's £42 a month
- £42 × 12 = £504 for the year
That's £504 a year, or £42 a month, taken automatically through PAYE, the same way Income Tax and National Insurance are. Nothing at all comes out below £29,385; every plan works this same way, just with its own threshold and rate.
Comparing the plans
Same £35,000 salary, repaid under each plan:
| Plan | Annual repayment | Monthly |
|---|---|---|
| Plan 1 | £720 | £60 |
| Plan 2 | £504 | £42 |
| Plan 4 | £108 | £9 |
| Plan 5 | £900 | £75 |
| Postgraduate Loan (on its own) | £840 | £70 |
Plan 4 repays the least here because it has the highest threshold, £33,795. The least amount of this salary sits above it. Plan 5 repays the most, for the opposite reason: its £25,000 threshold is the lowest of the four, so more of the same salary is exposed to the 9% rate. The rate itself (9%) is identical across all four plans. The threshold is the only thing that differs between them.
If you also have a Postgraduate Loan
Say the same £35,000 earner from the example above also has a Postgraduate Loan, on top of their Plan 2 undergraduate loan. The two are worked out completely separately, against their own thresholds, and both come out of the same payslip: Plan 2 repayment stays at £504, and the Postgraduate Loan adds £840 on top, a combined £1,344 a year, not a single combined threshold or a choice between the two. This is also why a P60 or payslip shows Student Loan and Postgraduate Loan deductions as two separate lines, even though both are being repaid at the same time.
Can a pension contribution reduce what you repay?
Student loan repayments are calculated on the same gross pay figure as National Insurance, so of the three pension contribution methods on Your Pension Contributions Explained, only salary sacrifice reduces your student loan repayments too, for the same reason it's the only one that reduces NI: it's a genuine cut to your contractual salary, not just a payroll deduction. Relief at source and net pay arrangement leave your repayments completely unchanged.
When does it stop?
Repayments stop as soon as you've repaid the loan in full, but if you haven't by then, the loan is written off automatically after a set number of years, and nothing further is owed:
- Plan 1: 25 years after the April you were first due to repay (or age 65, for loans first paid before September 2006).
- Plan 2 and Postgraduate Loan: 30 years after the April you were first due to repay.
- Plan 4: 30 years after the April you were first due to repay (or age 65, for loans first paid before August 2007).
- Plan 5: 40 years after the April you were first due to repay.
How to check your plan is right
Your P60 and payslips show how much has been deducted, but not which plan it's being calculated against. If you're not sure, or think it might be wrong:
- Check your student loan account online at gov.uk/sign-in-to-manage-your-student-loan-balance, which shows your plan type directly, alongside your balance and repayment history.
- If you're starting a new job, your P45 tells your new employer whether Student Loan (and/or Postgraduate Loan) deductions should continue. Check it's ticked correctly, since an employer with no information defaults to not deducting anything at all, which can leave you underpaying without realising.
- If your payslip shows a deduction under the wrong plan, or none at all when it should, contact your payroll team. This is a common payroll error, not something you need the Student Loans Company to fix.
This page explains general student loan repayment rules for employees and is not personalised advice; see the disclaimer. Whether to make voluntary extra repayments depends on your own circumstances, including your interest rate and how close you are to the write-off point; speak to a qualified financial adviser before making decisions.