Repaying your student loan
How much you repay
How much you repay depends on your income - the amount you earn (including things like bonuses and overtime) before tax and other deductions.
You鈥檒l repay a percentage of your income over the income 鈥榯hreshold鈥� for your type of loan, depending on how often you get paid.
The income thresholds are different for each plan type.
| Plan type | Yearly income threshold | Monthly income threshold | Weekly income threshold |
|---|---|---|---|
| Plan 1 | 拢26,065 | 拢2,172 | 拢501 |
| Plan 2 | 拢28,470 | 拢2,372 | 拢547 |
| Plan 4 | 拢32,745 | 拢2,728 | 拢629 |
| Plan 5 | 拢25,000 | 拢2,083 | 拢480 |
| Postgraduate Loan | 拢21,000 | 拢1,750 | 拢403 |
You鈥檒l repay either:
- 9% of your income over the threshold if you鈥檙e on Plan 1, 2, 4 or 5
- 6% of your income over the threshold if you鈥檙e on a Postgraduate Loan plan
The examples show how much you鈥檇 repay depending on your income and plan type:
Example
You鈥檙e on Plan 1 and have an income of 拢33,000 a year, meaning you get paid 拢2,750 each month.
Calculation:
拢2,750 鈥� 拢2,172 (your income minus the Plan 1 threshold) = 拢578聽
9% of 拢578 = 拢52.02
This means the amount you鈥檇 repay each month would be 拢52.
Example
You鈥檙e on Plan 4 and have an income of 拢36,000 a year, meaning you get paid 拢3,000 each month.
Calculation:
拢3,000 鈥� 拢2,728 (your income minus the Plan 4 threshold) = 拢272聽
9% of 拢272 = 拢24.48
This means the amount you鈥檇 repay each month would be 拢24.
If your income changes during the year
You鈥檒l make a repayment if your income goes over the weekly or monthly threshold for your plan (for example, if you鈥檙e paid a bonus or overtime). You can ask for a refund at the end of the tax year if your annual income is less than the yearly threshold for your plan.
Interest
How much interest you鈥檙e charged depends on which plan you鈥檙e on. You鈥檙e currently charged:
- 4.3% if you鈥檙e on Plan 1
- 4.3% if you鈥檙e on Plan 4
- 4.3% if you鈥檙e on Plan 5
- 7.3% if you鈥檙e on a Postgraduate Loan plan
If you鈥檙e on Plan 2
While you鈥檙e still studying, you鈥檒l be charged 7.3% interest. The interest rate will change either:
- on 6 April after you finish or leave your course
- on 6 April 4 years after the course started, if you鈥檙e studying part-time and your course is longer than 4 years
After this time, you鈥檒l start being charged interest based on your annual income.
| Annual income | Interest rate |
|---|---|
| 拢28,470 or less | 4.3% |
| 拢28,471 to 拢51,245 | 4.3%, plus up to 3% |
| 拢51,245 or more | 7.3% |
You can find out more about:
- how Plan 1 interest is calculated and interest rates for previous years
- how Plan 2 interest is calculated and interest rates for previous years
- how Plan 4 interest is calculated and interest rates for previous years
- how Plan 5 interest is calculated and interest rates for previous years
- how Postgraduate Loan interest is calculated and interest rates for previous years
If you鈥檙e on more than one plan type
How much you repay depends on which of your plan types has the lowest repayment threshold and whether or not you have a Postgraduate Loan.
If you do not have a Postgraduate Loan
You鈥檒l repay 9% of your income over the lowest threshold out of the plan types you have. You鈥檒l only have a single repayment taken each time you get paid, even if you鈥檙e on more than one plan type.
Example
You鈥檙e on Plan 1 and Plan 2 and have an income of 拢26,400 a year, meaning you get paid 拢2,200 each month. This is over the Plan 1 threshold of 拢2,172 but under the Plan 2 threshold of 拢2,372.
You鈥檒l repay 9% of your income over 拢2,172 a month because that is the lowest threshold out of the plan types you have.
Calculation:
拢2,200 鈥� 拢2,172 (your income minus the lowest threshold) = 拢28
9% of 拢28 = 拢2.52
This means the amount you鈥檇 repay each month would be 拢2.
If your income went over the Plan 2 threshold, you鈥檇 still only repay 9% of your income over the Plan 1 threshold. You would not have to make a separate repayment towards your Plan 2 loan.
If you have a Postgraduate Loan
You鈥檒l repay 6% of your income over the Postgraduate Loan threshold (拢21,000 a year) and 9% of your income over the lowest threshold for any other plan types you have.
Example
You have a Postgraduate Loan and a Plan 2 loan and have an income of 拢28,800 a year, meaning you get paid 拢2,400 each month. This is over the Postgraduate Loan threshold of 拢1,750 and the Plan 2 threshold of 拢2,372.
Calculation:
拢2,400 鈥� 拢1,750 (your income minus the Postgraduate Loan threshold) = 拢650
6% of 拢650 = 拢39
拢2,400 鈥� 拢2,372 (your income minus the Plan 2 threshold) = 拢28
9% of 拢28 = 拢2.52
This means the amount you鈥檇 repay each month would be 拢41.
If you have more than one job
You鈥檒l only make repayments from jobs where you鈥檙e paid over the threshold for your plan type, not your combined income.
Example
You have a Plan 1 loan and you have 2 jobs. Before tax and other deductions, you鈥檙e paid 拢1,000 a month from one job and 拢800 a month for the other.
You will not have to make repayments because neither salary is above the 拢2,172 a month threshold.
Example
You have a Plan 2 loan and you have 2 jobs. Before tax and other deductions, you鈥檙e paid 拢2,400 a month from one job and 拢500 a month for the other.
You will only make repayments on the income from the job that pays you 拢2,400 a month because it鈥檚 above the 拢2,372 threshold.
If you鈥檙e self-employed
HM Revenue and Customs (HMRC) will work out how much you repay each year from your tax return. Your repayments will be based on your income for the whole year.
If you鈥檝e already made repayments from a salary, HMRC will deduct them from the amount you have to repay.