Student Loan Repayment Thresholds 2025/26
Student loan repayment thresholds for the 2025/26 tax year: Plan 1 is £24,990, Plan 2 is £27,295, Plan 4 is £31,395, Plan 5 is £25,000, and Postgraduate is £21,000. You repay 9% of income above your plan’s threshold (6% for Postgraduate loans). Repayments are deducted automatically through PAYE.
All plan thresholds and rates
| Plan | Threshold | Rate | Who | Write-off |
|---|---|---|---|---|
| Plan 1 | £24,990 | 9% | England/Wales loans before Sept 2012, or Northern Ireland | Age 65 |
| Plan 2 | £27,295 | 9% | England/Wales loans from Sept 2012 | 30 years after graduation |
| Plan 4 | £31,395 | 9% | Scottish undergraduate loans | 30 years after graduation |
| Plan 5 | £25,000 | 9% | England loans from Aug 2023 onwards | 40 years after graduation |
| Postgraduate | £21,000 | 6% | Postgraduate Master's or Doctoral loans | 30 years |
How repayments work
You only repay student loans on income above your plan’s threshold. For example, on Plan 2 with a £30,000 salary:
- Income above threshold: £30,000 − £27,295 = £2,705
- Annual repayment: £2,705 × 9% = £243.45
- Monthly repayment: £20.29
If you have both an undergraduate and Postgraduate loan, you repay both simultaneously. Each is calculated independently against its own threshold and rate.
Can I have two student loans?
Yes. If you have an undergraduate loan (Plan 1, 2, 4, or 5) and a Postgraduate loan, both are repaid at the same time. On a £35,000 salary with Plan 2 + Postgraduate:
- Plan 2: 9% of (£35,000 − £27,295) = £57.88/month
- Postgraduate: 6% of (£35,000 − £21,000) = £70.00/month
- Total: £127.88/month
Voluntary overpayments
You can make voluntary overpayments to the Student Loans Company at any time. This can make sense if you are close to paying off your loan and want to stop interest accruing, or if you are on Plan 2 or Plan 5 where interest rates can be significant. However, if your remaining balance is likely to be written off before you fully repay, voluntary overpayments may not be worthwhile. Plan 2 interest is charged at RPI plus up to 3%, depending on your income. Plan 5 interest is capped at RPI only, making it the cheapest plan for graduates earning above the threshold.
Threshold freezes and fiscal drag
Like the Personal Allowance, student loan thresholds have not kept pace with wage growth in recent years. For Plan 2, the threshold was frozen at £27,295 for 2025/26, meaning graduates are repaying more in real terms as wages rise. Plan 5 was introduced with a fixed £25,000 threshold that does not rise with inflation, so the effective burden increases each year. This means a larger proportion of your salary is subject to repayments over time, even if your real purchasing power has not increased.
Source: Gov.uk — Repaying your student loan. Last updated: April 2025.