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It works more like a tax than a loan
A student loan doesn't behave like a credit card or a car loan. What you repay depends on what you earn, not on how much you borrowed. Earn below the threshold and you pay nothing that month. Earn above it and you pay a set share of the difference. And if you never clear it, what's left is written off.
That's why the balance on your statement can look frightening while the amount on your payslip stays fairly small. For most people, the number that matters day to day is what comes off each month.
Which plan are you on?
Your plan depends on where you're from and when your course started. You can't choose it, and you can be on more than one if you took out different loans.
| Plan | Who's on it | You repay (2026/27) |
|---|---|---|
| Plan 1 | Started in England or Wales before 1 September 2012, or from Northern Ireland | 9% above £26,900 |
| Plan 2 | Started an undergraduate course in England between 1 September 2012 and 31 July 2023, or in Wales from 1 September 2012 | 9% above £29,385 |
| Plan 4 | From Scotland | 9% above £33,795 |
| Plan 5 | Started an undergraduate course in England from 1 August 2023 | 9% above £25,000 |
| Postgraduate Loan | A master's or doctoral loan from England or Wales | 6% above £21,000 |
Not sure? Sign in to your student loan account on GOV.UK. It shows your plan and your balance.
How much you repay
You repay 9% of what you earn above your plan's threshold, or 6% above £21,000 for a Postgraduate Loan. If you have an undergraduate loan and a Postgraduate Loan, you repay both at the same time.
Here's what comes off each month on a £30,000 salary, worked out the way a monthly payroll would:
| Plan | Monthly repayment on £30,000 |
|---|---|
| Plan 1 | £23 |
| Plan 2 | £4 |
| Plan 4 | £0 |
| Plan 5 | £37 |
| Postgraduate Loan | £45 |
Try your own salary in our take-home pay calculator.
When repayments start
You're due to start repaying in the April after you leave your course. If you're employed, your employer then takes repayments through payroll, along with tax and National Insurance, and you'll see a student loan line on your payslip. If you're self-employed, you repay through your Self Assessment tax return instead.
Employers work out repayments on each payday's pay, not your yearly salary. So a month with overtime or a bonus can mean a bigger repayment that month, even if your yearly pay stays under the threshold. If that leaves you paying too much over the tax year, you can ask for it back.
When your loan is written off
- Plan 1: 25 years after the April you were first due to repay, if your first loan was paid on or after 1 September 2006. Older loans are cancelled when you turn 65.
- Plan 2: 30 years after the April you were first due to repay.
- Plan 4: 30 years after the April you were first due to repay, for loans first paid from 1 August 2007. Older loans are cancelled at 65 or after 30 years, whichever comes first.
- Plan 5: 40 years after the April you were first due to repay.
- Postgraduate Loan: 30 years after the April you were first due to repay.
A loan is also cancelled if you die, or if you can no longer work because of illness or disability.
Does it affect your credit score or a mortgage?
Student loans from the Student Loans Company don't usually appear on your credit report. But mortgage lenders look at your take-home pay, and repayments reduce it, so they can affect how much a lender is willing to offer.
Should you pay it off early?
You can make extra payments whenever you like, with no penalty. Whether that's worthwhile depends on whether you'd clear the loan before it's written off. For many people, particularly on Plan 2, the loan is written off before it's repaid in full. For them, extra payments can simply reduce the amount that would have been written off anyway. Check your balance and interest rate in your online account before you decide.
Common questions
Do I need to tell my employer about my student loan?
Yes. When you start a job, tick the right plan on the starter checklist, or let payroll know. HMRC will also tell your employer to start taking repayments.
What happens if I earn less than the threshold?
You pay nothing. Repayments start again automatically if your pay goes back above the threshold.
Do I still repay if I move abroad?
Yes. You need to tell the Student Loans Company, and you'll repay them directly rather than through UK payroll. The threshold depends on the country you live in.
Can I get money back if I've paid too much?
Yes. If repayments were taken but your income over the whole tax year was below your threshold, you can ask the Student Loans Company for a refund.
Sources
We checked this guide against these sources on 13 October 2026. Rules and allowances can change, so check the latest position before you act.
- GOV.UK: Which student loan repayment plan you're on
- GOV.UK: How much you repay on your student loan
- GOV.UK: When your student loan gets written off or cancelled
- HMRC: Employer Bulletin, February 2026 (2026/27 student loan thresholds)
This guide is general information, not personal financial advice. Read our full disclaimer.