Student loan repayments: how much you actually pay
What comes out of your pay on every plan and every common salary, why a pension contribution does not change it, and when the balance gets written off.
You repay 9% of whatever you earn above your plan's threshold, or 6% on a Postgraduate Loan. Nothing else about the loan moves that number: not the amount you borrowed, not the interest rate, not how long you have been paying. On a £30,000 salary that is £4 a month on Plan 2 and £37 on Plan 5. On £45,000 it is £117 and £150. That gap between two people on the same salary is the first thing worth knowing: the plan you happen to be on matters far more than anything you can decide. The tables below give every common salary on every plan, so you can read your own figure off without working anything out.
The short version
- You repay a slice of your income above a threshold, never a slice of your balance. Owing £20,000 or £60,000 makes no difference to the monthly figure.
- 2026/27 thresholds: Plan 1 £26,900 · Plan 2 £29,385 · Plan 4 £33,795 · Plan 5 £25,000 · Postgraduate £21,000. It is 9% above the threshold on all of them except the Postgraduate Loan, which is 6%.
- It is worked out on each payslip, not on the year, so a bonus month can take a deduction even in a year you earn under the threshold.
- An ordinary workplace pension contribution cuts your income tax and does not cut your student loan deduction.
- The balance is written off after 25, 30 or 40 years depending on your plan. Overpaying only helps if you were going to clear it first.
What you repay each month
This is the table gov.uk does not print. It gives the monthly deduction for every plan across the salaries people actually earn, worked the way payroll works it: the annual threshold split across twelve months, the excess taken at the plan rate, and the result rounded down to the whole pound.
| Salary | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgraduate |
|---|---|---|---|---|---|
| £25,000 | £0 | £0 | £0 | £0 | £20 |
| £27,000 | £0 | £0 | £0 | £15 | £30 |
| £30,000 | £23 | £4 | £0 | £37 | £45 |
| £32,000 | £38 | £19 | £0 | £52 | £54 |
| £35,000 | £60 | £42 | £9 | £75 | £69 |
| £40,000 | £98 | £79 | £46 | £112 | £95 |
| £45,000 | £135 | £117 | £84 | £150 | £120 |
| £50,000 | £173 | £154 | £121 | £187 | £145 |
| £60,000 | £248 | £229 | £196 | £262 | £195 |
| £75,000 | £360 | £342 | £309 | £375 | £270 |
Monthly student loan deduction, 2026/27 thresholds, salary paid in equal twelfths. A zero means the salary sits at or below that plan's threshold, so nothing is taken. Every figure is produced by the same engine as the take-home pay calculator, so the table cannot drift away from the tool.
Two things are worth noticing. A Postgraduate Loan takes the most at low salaries, because its £21,000 threshold is the lowest of the five even though its rate is the lowest at 6%. And Plan 4, the Scottish plan, takes the least of the four 9% plans at every salary, because its £33,795 threshold is the highest. That lowest rate is why the Postgraduate Loan does not stay the dearest: at £59,385 the two cross, and above it Plan 4 takes more. The table shows it happening between the £50,000 and £60,000 rows. The plan you happen to be on is worth more to you than any decision you can make about the loan.
Which plan you are on
Nearly everything about your repayment follows from this, and plenty of people have it wrong. It is set by where you got your funding and when your course started, not by what you studied.
| Plan | Who is on it | Threshold | Written off |
|---|---|---|---|
| Plan 5 | England, course started on or after 1 August 2023 | £25,000 | 40 years |
| Plan 2 | England, course started 1 September 2012 to 31 July 2023 · Wales, on or after 1 September 2012 | £29,385 | 30 years |
| Plan 1 | England or Wales, course started before 1 September 2012 · all Northern Ireland borrowers | £26,900 | 25 years, or at 65 for pre-2006 loans |
| Plan 4 | All Student Awards Agency Scotland borrowers | £33,795 | 30 years |
| Postgraduate | Master's or doctoral loan, England and Wales | £21,000 | 30 years |
The catch most people miss: a Scottish postgraduate is on Plan 4, and a Northern Irish postgraduate is on Plan 1. The Postgraduate Loan plan only covers master's and doctoral loans from England and Wales. Scotland and Northern Ireland put every borrower on one plan whatever they studied.
There is one more wrinkle new to 2026/27. Plan 5 only entered payroll software on 6 April 2026, and where an employee cannot say which plan they are on, the employer is told to default to Plan 5 until HMRC sends a start notice. If you are on Plan 4 and your payslip is deducting on the £25,000 Plan 5 threshold, you are paying too much. You can download an active plan type letter to show your employer, and claim the difference back.
What actually lands in your bank
The loan is only one of three deductions, and nobody meets it on its own. Here is the whole payslip on Plan 2, from gross salary down to what arrives, with the loan line in the middle where it belongs.
| Salary | Gross a month | Income tax | National Insurance | Student loan | Take-home |
|---|---|---|---|---|---|
| £25,000 | £2,083 | £207 | £83 | £0 | £1,793 |
| £30,000 | £2,500 | £291 | £116 | £4 | £2,089 |
| £35,000 | £2,917 | £374 | £150 | £42 | £2,351 |
| £45,000 | £3,750 | £541 | £216 | £117 | £2,876 |
| £60,000 | £5,000 | £953 | £268 | £229 | £3,551 |
Plan 2, 2026/27, rest of UK, no pension contribution. Change the plan, add a pension or switch to Scottish rates in the take-home pay calculator.
The number that follows from this, and that is rarely said out loud: once you are over every threshold, the next pound of a pay rise is taxed at 20%, charged 8% National Insurance and takes 9% student loan. That is 37% gone. Add a Postgraduate Loan and it is 43%. A higher-rate earner carrying both keeps 43p in the pound: 40% tax, 2% National Insurance, 9% and 6%. The loan is not a debt in the way a credit card is a debt. While you are repaying it, it behaves like an extra band of National Insurance, and it is worth budgeting for as one.
What counts as income
HMRC does not define this separately for student loans. It borrows the National Insurance definition wholesale, and the rule in its own manual is blunt: if a payment is liable to Class 1 National Insurance, it is liable to student loan repayments too. That single sentence settles almost every question people have.
So the deduction is taken on your wages, your overtime, your bonuses, tips paid through your employer, Statutory Sick Pay, Statutory Maternity Pay and any benefit in kind that carries Class 1 National Insurance. It is not taken on redundancy payments, dividends from shares, tips handed to you directly, pensions in payment, reimbursed business expenses, or any benefit in kind that does not carry Class 1 National Insurance.
One consequence catches people with two jobs. Each employment is tested separately against the threshold, not your combined income. Two jobs at £18,000 each is £36,000 a year with nothing deducted from either, because neither one is over the line on its own. That stops being true if you file a Self Assessment return, where every employment is added together and the deduction is worked out on the whole year, along with self-employed profits, property income and unearned income above £2,000.
Pensions and the deduction
This one is worth getting right, because the answer is the opposite of the one people expect from income tax.
Pay into a workplace pension and your income tax bill falls, because the contribution comes out of the pay your tax is worked out on. Your student loan deduction does not move. The reason sits in the two rules above: the loan follows the Class 1 National Insurance definition of earnings, and HMRC states that National Insurance must be assessed on gross earnings before any pension contribution is deducted, with no equivalent relief. The pay the 9% is charged on is the pay before your pension came out.
So a £2,000 annual pension contribution saves a basic-rate taxpayer £400 of income tax and £0 of student loan. That is not a reason to pay in less. It is a reason not to expect a pension contribution to shift your loan deduction, and to work out the two separately when you are planning. The salary sacrifice calculator and salary sacrifice explained cover how employer arrangements differ from an ordinary contribution.
Why a bonus month stings
The deduction is not worked out on your year. It is worked out on each pay period, against a threshold that is your annual one split across the twelve months. Your monthly threshold is £2,241.66 on Plan 1, £2,448.75 on Plan 2, £2,816.25 on Plan 4, £2,083.33 on Plan 5 and £1,750.00 on a Postgraduate Loan. Go over it in a month and a deduction comes out of that month, whatever the rest of the year looks like.
That is why a bonus, a month of heavy overtime or a single large commission payment can take a chunk of student loan from someone who earns well under the annual threshold across the year as a whole. It is working exactly as designed, and it is not an error your employer has made.
You can claim it back, with two conditions attached. Your income for the whole tax year has to come in below the annual threshold for your plan, and you cannot ask until the year has ended and the Student Loans Company has confirmed your income with HMRC. If you hold more than one plan, the test is the lowest threshold of the ones you hold.
Interest, and why it changes nothing
Interest is the most talked-about part of a student loan and the least consequential for most people. It changes your balance. It does not change your monthly repayment by a penny, because your repayment is a percentage of your income and nothing else.
| Plan | Interest rate | How it is set |
|---|---|---|
| Plan 1 | 4.1% | The lower of RPI and the Bank base rate plus 1% |
| Plan 2 | 4.1% to 6% | RPI up to RPI plus 3%, sliding with income, capped at 6% |
| Plan 4 | 4.1% | Set separately for Scotland |
| Plan 5 | 4.1% | RPI |
| Postgraduate | 6% | RPI plus 3% would be 7.1%, capped at 6% |
Rates for 1 September 2026 to 31 August 2027. RPI is 4.1% for that period and the rate is reset every 1 September from the previous March's RPI.
Plan 2 is the one that slides. Earn £29,385 or less and you pay RPI at 4.1%. Earn £52,885 or more and the formula gives RPI plus 3%, which is 7.1%. In between it moves proportionally: gov.uk's own examples put £35,000 at 4.82%, £40,000 at 5.46% and £45,000 at 6.09%. The cap then pulls anything over 6% back down to 6%, so nobody on Plan 2 is charged more than that at the moment. The cap exists to keep the rate in line with commercial rates, the Department for Education reviews it monthly against Bank of England data, and it is not currently applied to Plan 5.
If your balance is going up despite paying every month, this is why: at a moderate salary the interest charged can exceed the 9%, so the number on your statement grows. For most borrowers that matters less than it looks, because of what happens at the end.
When it gets written off
The balance is cancelled on a fixed date whether or not you have cleared it, and the date depends on your plan: 25 years after the April you were first due to repay on Plan 1 (or at 65 if your first loan payment came before 1 September 2006), 30 years on Plan 2, Plan 4 and a Postgraduate Loan, and 40 years on Plan 5. The clock starts the April you became due to repay, not the day you graduated and not the day you started repaying.
That 40 years is the real cost of the Plan 5 deal. It comes with the lowest threshold of the lot at £25,000, so you start repaying earlier and keep repaying a decade longer than someone on Plan 2. A loan is also cancelled on death, and the Student Loans Company may cancel it if you claim certain disability benefits, on evidence.
Should you overpay?
There is no penalty for paying extra, and gov.uk attaches its own warning to the idea: you might not benefit, because the loan will be written off at the end of the term.
That is the whole decision, and it is not really about the interest rate. Ask one question: on your realistic earnings, will you clear the entire balance before the write-off date? If the answer is yes, overpaying saves you real interest and the sums work like any other debt. If the answer is no, every extra pound you pay is a pound that was going to be cancelled, and you have swapped it for nothing. The people with most to gain from overpaying are those with small balances and high salaries, which is exactly the group least likely to worry about it.
Two things worth weighing before you do it. Overpaying cannot be undone: the money is gone and you cannot borrow it back at 4.1%. And a student loan does not appear on your credit file, so clearing it does nothing for your credit score, though removing the deduction from your payslip does lift the income a mortgage lender can lend against.
To see what any of this does to the money you actually take home, the take-home pay calculator runs your salary, plan, pension and region together. For the rest of the payslip, take-home pay explained and how National Insurance works cover the other two deductions.
Common questions
- How much student loan do I pay per month on £30,000?
- On a £30,000 salary in 2026/27 you repay £4 a month on Plan 2, £37 a month on Plan 5, £23 a month on Plan 1 and nothing at all on Plan 4, whose £33,795 threshold is above that salary. A Postgraduate Loan on the same salary takes £45 a month. The plan you are on matters more than the amount you borrowed, which has no effect on the monthly figure whatsoever.
- Does a pension contribution reduce my student loan repayment?
- It depends on how the contribution is taken, and the rule is not the same as it is for income tax. HMRC works the student loan deduction out on the same earnings your employer pays secondary Class 1 National Insurance on. National Insurance is charged on gross pay before any pension contribution comes off, and HMRC states there is no equivalent National Insurance relief for pension contributions. So a contribution taken from your pay under an ordinary workplace scheme lowers your income tax and leaves your student loan deduction exactly where it was.
- Why did my bonus month take so much student loan?
- Because the deduction is worked out on each pay period, not on the year. If a bonus pushes one month above the monthly threshold, a deduction comes out of that month, even if your income for the whole year ends up below the annual threshold. You can ask for a refund if your annual income did come in under the yearly threshold for your plan, but not until after the tax year has ended and the Student Loans Company has confirmed your income with HMRC.
- I have an undergraduate and a postgraduate loan. What comes out?
- Two separate deductions, not one. You repay 6% of income above the £21,000 Postgraduate Loan threshold and 9% above the lowest threshold of any other plan you hold. gov.uk works an example: on £2,500 a month with a Plan 2 loan and a Postgraduate Loan, that is 6% of £750 which is £45, plus 9% of £52 which is £4.68, so £49 in total. Payroll puts the money against the postgraduate loan first, because it carries the higher interest rate.
- Does my student loan affect my credit score?
- No. Student loans do not appear on credit reports and do not affect your credit score. They do show on your payslip, though, so a lender can see the deduction when it runs an affordability check for a mortgage or other borrowing, and it reduces the income they can lend against.
- Is it worth paying my student loan off early?
- There is no penalty for doing it, but gov.uk itself warns that you might not benefit, because the balance is written off at the end of the loan term, cleared or not. The question is not whether the interest rate looks high; it is whether you are on course to repay the whole balance before the write-off date. If you are not, every extra pound is a pound you have handed over that would have been cancelled anyway.
- Do I keep repaying if I move abroad?
- Yes, and you have to tell the Student Loans Company if you are leaving the UK for more than three months. The repayment rules are the same but the thresholds are set separately for each country. If you do not keep your details up to date you build up arrears, you carry on repaying at the previous country's rate, and for interest you are charged the highest rate.
- Is this article financial advice?
- No. It sets out the published 2026/27 thresholds, rates and rules and shows what they come to, with every figure worked by the same engine as our take-home pay calculator. The figures are estimates to help you plan, not financial advice, and they assume a salary paid in equal monthly amounts. For a decision that matters, check with the Student Loans Company or a qualified adviser.
About this article
Written by the calcd team. We build UK money calculators and explain the numbers behind them in plain English. The thresholds, rates and rules come from gov.uk, with the deduction mechanics from HMRC's SL3 deduction tables for 2026 to 2027 and the interest rates from the Department for Education announcement of 10 August 2026. Every repayment figure on this page is worked at page load by the same tested engine as our take-home pay calculator, which is locked to gov.uk's own published worked examples. Figures are estimates for the 2026/27 tax year and assume a salary paid in equal monthly amounts, not financial advice. Last updated September 2026.