UK student loans are nothing like a bank loan. You only repay when you earn above a threshold, repayments are income-based rather than debt-based, and most graduates never fully repay before the debt is written off.
Plan 2 vs Plan 5: Which Are You On?
Your repayment plan depends on when you started your course. Plan 2 covers students who started between 2012 and July 2023. Plan 5 covers students starting from August 2023 onwards. Plan 5 is generally less favourable.
- Plan 2: started course Sept 2012 – July 2023 (England/Wales)
- Plan 5: started course Aug 2023 onwards (England)
- Plan 1: Northern Ireland, or pre-September 2012 England/Wales (Scottish students are on Plan 4)
- Postgraduate Loan (PGL): separate plan — 6% above £21,000
- Check your plan at gov.uk or your Student Finance account
How Much You Repay
You repay 9% of earnings above the threshold — nothing more, nothing less. It comes directly from your payslip, like tax. Your repayment is solely based on what you earn, not what you owe.
- Plan 2 threshold (2026/27): £29,385/year
- Plan 5 threshold (2026/27): £25,000/year
- Rate: 9% of earnings above threshold
- Earn £35,000 on Plan 2: repay 9% of £5,615 = ~£505/year = ~£42/month
- Earn below threshold: repay nothing
What happens if I lose my job?
Repayments stop automatically when your income falls below the threshold. There's no risk of defaulting on a student loan in the traditional sense.
Write-Off Date
Any remaining balance is automatically written off after a set number of years. Plan 2: written off after 30 years. Plan 5: written off after 40 years. For most graduates on average salaries, the loan is written off with significant balance remaining.
- Plan 2: written off 30 years after April of graduation year
- Plan 5: written off 40 years after April of graduation year
- Plan 1: written off when you reach 65 or 25 years from repayment start
- Written off automatically — nothing to do on your part
- No impact on credit score when written off
Should You Overpay?
For most people, no. Because most graduates won't fully repay before write-off, paying extra just reduces the written-off amount. The exception: very high earners who will definitely clear the loan before write-off.
- High earner who WILL repay in full: overpayment saves interest
- Average earner: loan likely written off — don't overpay
- Use MoneySavingExpert's free repayment calculator
- Better uses: pension, ISA, emergency fund, high-interest debt
- Never prioritise student loan over high-interest debt
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