In this section: Every tax
Student loan repayments
Last updated . Figures refresh every night. How each figure is worked out.
Graduates repay 9% of income above a threshold: £29,385 a year on Plan 2 and £25,000 on Plan 5, collected through PAYE like tax. Whatever is left is written off after 30 years on Plan 2 and 40 on Plan 5. The government expects only 32% of recent Plan 2 borrowers to repay in full, so for most graduates it behaves like an extra 9% tax on earnings for decades, though unlike a tax it stops once the loan is cleared.
Figure as of 22 September 2026. Source: GOV.UK.
Key figures
- £29,385Plan 2: repay 9% of income above up on a year earlier: +£915 (+3.2%) vs 2025–26
- £25,000Plan 5: repay 9% of income above The newest plan, for courses from August 2023
- 32%Of recent Plan 2 borrowers expected to repay in full Plan 2 full-time starters, 2022/23
- 6%Top Plan 2 interest rate From 1 September 2026
Source: GOV.UK.
Which plan are you on, and what do you repay?
| Plan | Who is on it | Repay above | A year ago | Rate | Interest | Written off |
|---|---|---|---|---|---|---|
Plan 1Details for Plan 1 | England and Wales courses started before 1 September 2012; all Northern Ireland borrowers | £26,900 | £26,065 | 9% | Currently 4.1% | 25 years after the April you were first due to repay (loans first paid before September 2006: at 65) |
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Plan 2Details for Plan 2 | England and Wales undergraduate courses started between 1 September 2012 and 31 July 2023 | £29,385 | £28,470 | 9% | Varies with income: RPI on lower incomes, up to RPI plus 3 points, capped at 6% | 30 years after the April you were first due to repay |
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Plan 4Details for Plan 4 | Borrowers from Scotland (Student Awards Agency Scotland) | £33,795 | £32,745 | 9% | Currently 4.1% | 30 years after the April you were first due to repay (loans first paid before August 2007: at 65, or 30 years, whichever comes first) |
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Plan 5Details for Plan 5 | England undergraduate courses started on or after 1 August 2023 | £25,000 | — | 9% | Currently 4.1% | 40 years after the April you were first due to repay |
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PostgraduateDetails for Postgraduate | Master’s and doctoral loans from England and Wales | £21,000 | £21,000 | 6% | Currently 6% | 30 years after the April you were first due to repay |
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The Plan 2 threshold is frozen at £29,385 for three years from April 2027, under Budget 2025, where it would normally rise with earnings. Interest rates from 1 September 2026: Plan 2 (lowest incomes) 4.1%, Plan 2 (highest incomes) 6%, Postgraduate 6%, Plan 5 4.1%.
Checked 22 September 2026. Source: GOV.UK. Checked by hand 22 September 2026.
How do repayments stack on top of income tax?
Repayments come out of the same payslip as income tax and National Insurance. For a Plan 2 graduate earning between the threshold and £50,270, the deduction from each extra pound is 37%: 20% income tax, 8% National Insurance and 9% loan. Above £50,270 it is 51%, and in the £100,000 to £125,140 band 71%. See hidden marginal tax rates for the chart.
Is it a graduate tax?
| Group | Expected to repay in full | Source |
|---|---|---|
All full-time undergraduate starters, 2025/26 (mostly Plan 5)Details for All full-time undergraduate starters, 2025/26 (mostly Plan 5) | 55% | DfE, Student loan forecasts for England 2025-26 |
Plan 2 full-time starters, 2022/23Details for Plan 2 full-time starters, 2022/23 | 32% | DfE, Student loan forecasts for England 2025-26 |
The government forecasts it will not recover about 39% of the value of Plan 2 loans and 33% of Plan 5 loans issued in 2025-26 (DfE, July 2026). Plans, thresholds, interest and write-off rules are from GOV.UK, Repaying your student loan, read on 22 September 2026.
Why it works like a tax
- Repayments depend on income, not on what you borrowed, collected by HMRC through PAYE.
- Most Plan 2 borrowers will pay 9% above the threshold for the full 30 years and never clear the balance.
- For them, the interest rate changes nothing about what they pay: only the threshold and the rate matter.
- Freezing the threshold raises what graduates pay without any change to the loan terms, like a frozen tax threshold.
Why it is not a tax
- Repayments stop once the loan and interest are repaid; a tax would not.
- High earners who repay early pay less in total than they would under a lifelong graduate tax.
- It is a personal debt with a balance, statements and the option to repay early.
- Those who never go to university never pay it.
Where does the money go?
Student loan repayments
Paid to a named body the Student Loans Company and the Department for Education, collected by HMRC through PAYE.
Education (Student Loans) (Repayment) Regulations 2009
Legal position as of 22 September 2026. Source: legislation.gov.uk. Checked by hand 22 September 2026.
Common questions
- What is the student loan repayment threshold?
- Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000, Postgraduate £21,000, for 2026–27.
- Is a student loan a graduate tax?
- For most Plan 2 borrowers it works like one, because they will repay 9% above the threshold for 30 years without clearing the balance. Unlike a tax, it stops if the loan is repaid.
Sources for this page
| Source | Publisher | Figures as of | Updated | Licence |
|---|---|---|---|---|
| GOV.UK, Repaying your student loan; DfE student loan forecasts for England | GOV.UK | 22 September 2026 | annual | Open Government Licence v3.0 |
| legislation.gov.uk and official guidance, provision by provision | legislation.gov.uk | 22 September 2026 | annual | Open Government Licence v3.0 (legislation.gov.uk) |
Each source's figures are used under the licence shown. Our own words, analysis, charts and derived calculations are ours, under CC BY 4.0.