Student Loan Repayments 2026/27: Thresholds, Rates and Your Payslip

Repayment thresholds for 2026/27

Thresholds change each 6 April. Your employer uses the weekly or monthly figure for each pay period.

Which plan are you on?

You can have more than one plan at once. Check yours in your Student Loans Company online account.

• Plan 1: English or Welsh students who started before 1 September 2012, and Northern Ireland students.
• Plan 2: English or Welsh undergraduates who started between 1 September 2012 and 31 July 2023 (Wales: from September 2012 onwards).
• Plan 4: Scottish students funded by SAAS.
• Plan 5: English undergraduates starting on or after 1 August 2023.
• Postgraduate Loan: English or Welsh master's or doctoral loans. Scottish postgraduates are on Plan 4 and Northern Irish postgraduates on Plan 1.

Worked examples on a £35,000 salary

The calculation is simple: (salary minus threshold) x rate. Monthly deductions are worked out on that month's pay and rounded down to the nearest pound.

Plan 2 on £35,000: (£35,000 minus £29,385) x 9% = £505.35 a year, about £42 a month.

Plan 5 on £35,000: (£35,000 minus £25,000) x 9% = £900 a year, £75 a month.

Plan 2 plus a Postgraduate Loan on £35,000: £505.35 plus (£35,000 minus £21,000) x 6% = £840, a combined £1,345.35 a year.

How student loans show on your payslip

Your payslip will show a line such as "Student Loan" or "SL" (and "PGL" for a Postgraduate Loan). Unlike PAYE income tax, the deduction is not cumulative: each pay period is looked at alone. A bonus or overtime month can trigger a repayment even if your annual pay is below the threshold. If your total income for the year ends up under the annual threshold, you can ask the Student Loans Company for a refund.

Repayments are calculated on gross pay after salary sacrifice, so sacrificing pay into a pension also cuts student loan deductions. Pension contributions under a net pay arrangement or relief at source do not.

If you are self-employed or have unearned income over £2,000 (such as rent or savings interest), repayments are calculated through your Self Assessment return.

Changes to know about

The government announced at the Autumn Budget 2025 that the Plan 2 threshold will be held at £29,385 for three years from April 2027, rather than rising with earnings. Graduates on Plan 2 will therefore start repaying at the same cash salary until April 2030, increasing repayments as pay grows.

Making extra voluntary repayments is allowed with no penalty, but many Plan 2 and Plan 5 borrowers will never clear the balance before write-off, so overpaying can be money you would not otherwise have had to pay.

Two jobs, self-employment and moving abroad

• Two jobs: each employer checks your pay against the threshold separately. If neither job is over the threshold but your combined income is, the shortfall is collected through Self Assessment if you file one.
• Pension income: HMRC uses your total income including workplace, private and State Pensions when working out repayments.
• Moving abroad: tell the Student Loans Company if you leave the UK for more than 3 months. Overseas thresholds differ by country, and failing to update can lead to arrears and a higher interest rate.
• Final year: repayments can continue for a few weeks after the loan is cleared. Switching to Direct Debit near the end avoids overpaying.

Your real marginal rate with a student loan

A student loan works like an extra 9% tax on income above your threshold, so a Plan 2 graduate in the basic-rate band keeps 63p of each extra £1, not 72p.

On £45,000 with a Plan 2 loan in England, the yearly deductions are £6,486.00 income tax, £2,594.40 NI and £1,405.00 student loan, leaving £34,514.60. Between £50,271 and £100,000 the marginal rate is 51% (40% + 2% + 9%). In the £100,000 to £125,140 taper band it reaches 71%. With a Postgraduate Loan as well, add another 6%.

Plan 5 repayments start in April 2026

Plan 5 covers English undergraduates who started courses from 1 August 2023. The first deductions are due from April 2026, at 9% of income above £25,000.

Plan 5 has the lowest threshold of the undergraduate plans and a 40-year term, so most Plan 5 borrowers will repay for far longer than Plan 2 borrowers did. A graduate on £30,000 repays £450 a year on Plan 5, against £55 on Plan 2.

Employers need a start notice or a new starter checklist that ticks Plan 5. If you are past the April after leaving your course, earn over the threshold and see no deduction on your payslip, tell your employer and check your student finance account.

Overpaying: a simple test

Overpaying only saves money if you would otherwise clear the loan before it is written off. Otherwise it is money you need never have paid.

• Estimate what you will repay in total: 9% of expected salary above the threshold each year, until write-off.
• Compare that with the balance plus the interest it will build up. If total repayments fall short of the balance, the remainder is written off, so overpaying would not save anything.
• High earners early in their career are the group most likely to clear Plan 2 or Plan 5. For them, overpaying can cut total interest.
• Voluntary repayments can be made at any time through your SLC account without a penalty, but they are final: GOV.UK says you cannot get a refund of extra repayments, so only overpay money you are sure you will not need.

Getting money back

GOV.UK lists four situations where you can ask for a refund: your annual income was below the threshold, you have paid more than the total you owe, you started repaying before you needed to, or your employer had you on the wrong repayment plan. Keep your payslips and P60s, because you will need them to make the claim.

Sign in to your student finance account to check your balance and repayments. A useful habit is to compare the year-to-date student loan line on your payslip with the repayments shown in your account. When you are close to clearing the loan, keep an eye on it: GOV.UK says it can take around 4 weeks for salary deductions to stop after the loan is repaid, and anything taken after that can be refunded.