Repaying your student loan

For the undergraduate student loan, there are two types of repayment plans: Plan 1 and Plan 2. Which plan you are on depends on when you take out your loan and where you live before you start University.

Plan 1 refers to all student loans started before September 2012. Plus, all students in Scotland or Northern Ireland (regardless of when you take out the loan).

Plan 2 refers to all student loans started from September 2012 onwards.

You can find out more about the different repayment plans on the Government's website.

You'll be on a postgraduate loan repayment plan if you are an English or Welsh student who took out a postgraduate master's loan after 1 August 2016, or if you took our a doctoral loan after 1 August 2018.

Find more information and check which repayment plan you're on by visiting the Government's website.

If you took out an undergraduate student loan, you'll only start repayments when you are earning over the threshold. From 6 April 2021 the repayment threshold is £27,295 a year (before tax and other deductions)

If you took out a postgraduate student loan (master's loan or doctoral loan), you'll  start repayments when you earn over the threshold. From 6 April 2021 the repayment threshold is £21,000 a year (before tax and other deductions)

Please note the thresholds change on 6 April every year. You can check the current repayment threshold by visiting the Government website.

For undergraduate student loans, you'll repay 9% of your income above £27,295.

For example, if your salary was £30,000 per year, the 9% would only apply to £2,705 meaning you would repay roughly £20 per month.

For postgraduate student loans, you'll repay 6% of your income above the repayment threshold.

If you have an undergraduate and postgraduate student loan, you'll repay 6% of your income above the postgraduate loan threshold and 9% of your income above the undergraduate loan repayment threshold.

Please note if you leave the UK for more than 3 months, your repayment amounts will be based on the country you are in. In this instance, it's important that you update your employment details with the Student Loan Company.

Loan repayments will be deducted from your salary, normally through the tax system. Your payslips will show you how much has been deducted.

If you are self employed, HMRC will work out your student loan repayments from your tax return. You will pay your student loan repayments the same time as you pay your tax.

Find out more about how to repay your student loan

Your repayments will stop if your salary falls below the repayment threshold. An example of this being if you take a career break or are unemployed.

Repayments only start again when you earn over the repayment threshold.

Undergraduate student loans (Plan 2) and postgraduate student loans

While you are studying, interest is 5.6%. This is made up of the Retail Price Index (RPI) plus 3%. RPI is currently set at 2.6%.

This rate applies until the 5 April after you finish or leave your course, or for the first four years of your course if you’re studying part-time, unless the RPI changes.

After that, your interest rate depends on your income in the current tax year. Please see the table below:

Find out how interest is calculated on undergraduate (Plan 2) student loans.

Find out how interest is calculated on a postgraduate loan.

Undergraduate student loans (Plan 1)

You currently pay interest of 1.1% on Plan 1. Find out how the interest is calculated and interest rates for previous years on the Government website.

If you have not repaid your loan after 30 years, from the April you were first due to repay, it is written off.