Student Loan Plan Types
Plan 1
Started before September 2012 (England/Wales)
Plan 2
Started September 2012 onwards (England/Wales)
Plan 4
Scottish students (from September 1998)
Plan 5
Started August 2023 onwards (England)
Postgraduate Loan
For Master's and Doctoral courses
How Repayments Work
9% Above Threshold
You only pay 9% on earnings above your plan's threshold, not on your total income.
Automatic Deduction
Repayments are taken automatically through PAYE alongside tax and NI from your salary.
Written Off Eventually
Any remaining balance is written off after the term ends (30 or 40 years depending on plan).
Example: Plan 2 Repayment
If you earn £35,000 with a Plan 2 loan:
Interest Rates Explained
Plan 1 & 4 Interest
Interest is the lower of RPI or Bank of England base rate plus 1%. Currently capped at 6.25% for 2024/25.
Plan 2 Interest
Interest varies based on your income:
Important: Interest vs Repayments
Many graduates pay less each month than the interest added, meaning their balance grows. However, don't panic - if you don't repay in full before the write-off date, the remaining balance is cancelled. Think of repayments as a graduate tax rather than a traditional loan.
When Is My Loan Written Off?
| Plan Type | Write-Off Period | Notes |
|---|---|---|
| Plan 1 | Age 65 or 25 years after first repayment due | Whichever comes first |
| Plan 2 | 30 years after first repayment due | April after you leave course |
| Plan 4 | 30 years or age 65 | Whichever comes first |
| Plan 5 | 40 years after first repayment due | Longest repayment term |
| Postgraduate | 30 years after first repayment due | Same as Plan 2 |