You repay a percentage of income above a threshold that depends on your plan: 9% for Plans 1, 2, 4 and 5, and 6% for Postgraduate loans. Nothing is taken below the threshold. Balances are written off after 25 to 40 years depending on the plan, so many graduates never repay in full — which is why the repayment works like a graduate tax and overpaying rarely pays off.
How repayment works
You repay a fixed percentage of everything you earn above a threshold — nothing on income below it. For employees it comes out through PAYEalongside tax; for the self-employed it’s collected through Self Assessment. Crucially, repayments are based on your income, not your balance — so what you owe doesn’t change what you pay each month.
The five plans for 2025/26
| Plan | Threshold | Rate | Write-off |
|---|---|---|---|
| Plan 1 | £26,065 | 9% | 25 yrs |
| Plan 2 | £28,470 | 9% | 30 yrs |
| Plan 4 | £32,745 | 9% | 30 yrs |
| Plan 5 | £25,000 | 9% | 40 yrs |
| Postgraduate | £21,000 | 6% | 30 yrs |
Which plan you’re on depends on when and where you studied: Plan 1 for older English/Welsh loans and all Northern Ireland loans; Plan 2 for England/Wales courses from 2012 to 2023; Plan 4 for Scottish loans; Plan 5 for English courses from September 2023; and Postgraduate for master’s and doctoral loans. You can only be on one undergraduate plan at a time.
The write-off — the half nobody explains
Whatever is left unpaid at the end of your plan’s term is cancelled — no bill, no credit-score mark. Plan 2 and Plan 4 are written off 30 years after you became liable to repay, Plan 5 after 40 years, Postgraduate after 30, and Plan 1 typically after 25. For many graduates the balance is never cleared in full, so the loan behaves like a temporary extra tax on income above the threshold.
Postgraduate loans stack
A postgraduate loan is the one combination that runs alongside an undergraduate plan. If you have both, you repay 6% above £21,000 andyour undergraduate plan’s 9% above its threshold at the same time — up to 15% of a broad slice of income. Our calculator handles the stack if you tick both.
Should you overpay?
Because unpaid balances are written off, voluntary overpayments only benefit you if you were going to clear the loan in full anyway — typically high earners with small balances. If the write-off will arrive first, every extra pound you pay is money you’d never have been asked for. There are no early-repayment penalties either way, so the decision is purely about whether you’ll clear it before the term ends. Our calculator’s years-to-clear projection is a good starting point.
Work out your repayments
See your monthly and annual repayment on any plan, plus a years-to-clear projection if you enter your balance.
Open the calculator