Student Loan Plans 1, 2, 4, 5 and Postgrad: Which Are You On?

The UK now has five overlapping student loan repayment plans, each with its own threshold, interest rate and write-off period. That's a lot to keep straight — especially when your payslip just says "Student Loan" with no explanation. This guide tells you which plan you're on and what it means for your monthly deductions. To model your own repayments, use our student loan repayment calculator.

The five plans at a glance

• Plan 1: pre-2012 English/Welsh borrowers, and Northern Irish borrowers whenever they studied. 2026/27 threshold £26,900. Deduction rate 9%.
• Plan 2: English/Welsh borrowers who started university between September 2012 and July 2023. Threshold £29,385. Rate 9%.
• Plan 4: Scottish borrowers (from the Student Awards Agency Scotland). Threshold £33,795. Rate 9%.
• Plan 5: English borrowers starting university from August 2023 onwards. Threshold £25,000. Rate 9%.
• Postgraduate loan: master's and doctoral loans across the UK. Threshold £21,000. Rate 6%.

How to tell which plan you're on

- Where did you study? Scottish universities generally mean Plan 4 for maintenance and tuition, though English students in Scotland typically get English loans. - When did you start your course? - Before September 2012 → Plan 1 - September 2012 – July 2023 → Plan 2 - August 2023 onwards (England) → Plan 5 - Have you taken a postgraduate loan? That's separate and repaid alongside your undergraduate loan.

If in doubt, log in to your Student Loans Company account — it names your plan explicitly. Your P60 also splits deductions between undergraduate and postgraduate loans.

The repayment maths

Every plan works the same way: you repay a percentage of your income above a threshold, calculated per pay period through PAYE. The threshold is annualised for salary purposes.

Someone on £35,000 with Plan 2 repays (£35,000 − £29,385) × 9% = £505.35 a year, or about £42.11 a month. Someone on the same salary with Plan 1 repays (£35,000 − £26,900) × 9% = £729 a year, and someone on Plan 5 repays (£35,000 − £25,000) × 9% = £900 a year — a hefty £371.05 more than Plan 2 for identical pay, purely because of the lower threshold.

Worked example: Plan 4 with a postgraduate top-up

Scottish graduates with both an undergraduate Plan 4 loan and a postgraduate loan repay both simultaneously. On a £40,000 salary:

• Plan 4: (£40,000 − £33,795) × 9% = £558.45 a year (about £46.54 a month)
• Postgraduate: (£40,000 − £21,000) × 6% = £1,140 a year (£95 a month)
• Combined annual deduction: £1,698.45, or roughly £141.54 a month

Postgraduate borrowers with no undergraduate loan pay a flat 6% on income above the PG threshold only.

Interest

Interest is where the plans really diverge:

• Plan 1, 4: interest is the Bank of England base rate + 1%, capped at the RPI.
• Plan 2: RPI plus a variable margin (up to 3%), depending on income.
• Plan 5: interest set at RPI only.
• Postgraduate: RPI + 3% while studying, then variable based on income.

For Plan 2 borrowers this matters because interest can outstrip repayments for higher earners, keeping the balance high. Plan 5 was designed to stop this by capping interest at RPI, but its longer 40-year repayment window means most borrowers will repay more in total.

Write-off

Every loan is written off eventually:

• Plan 1: at age 65 (or 25 years after entering repayment, for post-2006 loans).
• Plan 2: 30 years after you first became eligible to repay.
• Plan 4: after 30 years.
• Plan 5: after 40 years — the longest of any plan.
• Postgraduate: 30 years.

For many borrowers, especially on Plan 2 and Plan 5, the loan will never be fully repaid before write-off. That's why blanket advice to "clear it as fast as possible" doesn't always apply — extra payments only save money if you would have repaid the full balance anyway.

Which plan am I on? A quick self-check

• If you started an undergraduate degree in England before September 2012, or you're from Northern Ireland, you're almost certainly on Plan 1.
• If you started an undergraduate degree in England or Wales between 2012 and 2023, you're on Plan 2.
• If you're a Scottish-domiciled student, you're generally on Plan 4 regardless of when you studied.
• If you started an undergraduate degree in England from August 2023 onwards, you're on Plan 5.
• If you took a master's or doctoral loan, you also have a Postgraduate loan, repaid on top of any undergraduate plan.

Should you overpay?

It depends on which plan you're on and your income trajectory:

• High-earning Plan 1 borrower → overpaying can save interest and finish repayment faster.
• Plan 2 borrower on average earnings → probably not; the balance will likely be written off.
• Plan 5 borrower → rarely worthwhile; the 40-year window changes the maths.
• Postgraduate loan → depends on the specifics; the 6% rate makes it less painful to carry.

Your alternatives always deserve a look: paying off high-interest debt, increasing pension contributions (for the tax relief) or building an emergency fund typically beat overpaying a student loan for most borrowers.

Payroll deductions and self-assessment

If you're employed, your employer deducts repayments through PAYE and pays HMRC monthly. If you're self-employed or your income exceeds the PAYE threshold, the self-assessment return calculates the balance owed by 31 January each year.

Try your figures

Our student loan repayment calculator shows the annual and monthly figures for every plan side by side — a useful sanity check against your payslip, and a quick way to see how a pay rise or a plan change will affect your take-home. If you're eyeing a new job offer, drop the target salary into the take-home pay calculator as well to see the after-tax figure with your student loan already deducted, and read our companion guide on how take-home pay is calculated for the full picture.