Student Loan Thresholds and Interest Rates for 2026/27: Every Plan Compared
There are five different UK student loan repayment plans running at once, with five different thresholds, two different repayment percentages and a set of interest rates that do not agree with each other. Which one you are on depends on where you were living when you applied and what year your course started, and a lot of people are on the wrong one without knowing it.
Here is every figure for the 2026/27 tax year in one place, along with what it actually costs you each month.
The Thresholds
| Plan | Annual | Monthly | Weekly | Rate |
|---|---|---|---|---|
| Plan 1 | £26,900 | £2,241.66 | £517.30 | 9% |
| Plan 2 | £29,385 | £2,448.75 | £565.09 | 9% |
| Plan 4 | £33,795 | £2,816.25 | £649.90 | 9% |
| Plan 5 | £25,000 | £2,083.33 | £480.76 | 9% |
| Postgraduate Loan | £21,000 | £1,750.00 | £403.84 | 6% |
The monthly and weekly figures matter more than the annual one, because that is what your payroll actually uses. Deductions are worked out per pay period, not across the year, which has consequences we will come back to.
Which Plan Are You On?
It is set by the country that funded you and when your course started, not by where you live now or where you studied.
- England, course started on or after 1 August 2023: Plan 5 for undergraduate, PGCE, Advanced Learner Loans and the Lifelong Learning Entitlement.
- England, course started 1 September 2012 to 31 July 2023: Plan 2.
- England, course started before 1 September 2012: Plan 1.
- Wales, course started on or after 1 September 2012: Plan 2. Before that, Plan 1.
- Scotland: Plan 4, for undergraduate and postgraduate courses alike.
- Northern Ireland: Plan 1, for undergraduate and postgraduate courses alike.
- Master's and doctoral loans in England and Wales: the separate Postgraduate Loan plan.
If you have more than one loan you can be on more than one plan at the same time, and they are collected together. That is covered further down.
What It Costs You Each Month
| Salary | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgrad |
|---|---|---|---|---|---|
| £25,000 | £0 | £0 | £0 | £0 | £20.00 |
| £30,000 | £23.25 | £4.61 | £0 | £37.50 | £45.00 |
| £35,000 | £60.75 | £42.11 | £9.04 | £75.00 | £70.00 |
| £45,000 | £135.75 | £117.11 | £84.04 | £150.00 | £120.00 |
| £60,000 | £248.25 | £229.61 | £196.54 | £262.50 | £195.00 |
The pattern that stands out is Plan 5 against Plan 2. On £35,000, a Plan 5 graduate pays £75 a month while a Plan 2 graduate on the identical salary pays £42.11, purely because the Plan 5 threshold is £4,385 lower. Over a year that is nearly £400.
The Interest Rates
Student loan interest is set by academic year rather than tax year, running from 1 September to 31 August, and it is based on the Retail Prices Index for the previous March. March 2026 RPI was 4.1%, which is the figure driving the rates in force from 1 September 2026 to 31 August 2027.
On that basis Plan 1, Plan 4 and Plan 5 are all charged at 4.1%. The Postgraduate Loan is charged at 6%. Plan 2 is the awkward one.
Plan 2's variable interest
While you are studying, Plan 2 interest is set at RPI plus 3%, subject to a cap that is currently 6%. Once you have finished, the rate depends on what you earn:
| Income | Interest rate |
|---|---|
| £29,385 or less | 4.1% |
| £29,386 to £52,884 | 4.1% plus up to a further 1.9%, rising with income |
| £52,885 and above | 6% |
The cap is doing real work. Without it the taper would run from 4.1% up to 7.1%. A statutory instrument made in July 2026 deems the rate to be 6% wherever it would otherwise exceed 6%, for Plan 2 and Postgraduate Loans only, and only for the year to 31 August 2027. It then expires. That is a deliberate annual intervention rather than a permanent feature, so do not assume it will be there next year.
There is a second, separate cap in the background: student loan interest is not allowed to exceed rates on comparable commercial unsecured lending. It applies to Plans 2 and 5 and to Postgraduate Loans, never to Plan 1 or Plan 4, and it is reviewed monthly. The two caps are frequently written up as if they were the same thing. They are not.
When Each Plan Is Written Off
| Plan | Written off |
|---|---|
| Plan 1, first loan paid on or after 1 September 2006 | 25 years after the April you were first due to repay |
| Plan 1, first loan paid before 1 September 2006 | When you turn 65 |
| Plan 2 | 30 years after the April you were first due to repay |
| Plan 4, first loan paid on or after 1 August 2007 | 30 years after the April you were first due to repay |
| Plan 4, first loan paid before 1 August 2007 | Age 65, or 30 years, whichever comes first |
| Plan 5 | 40 years after the April you were first due to repay |
| Postgraduate Loan, England and Wales | 30 years after the April you were first due to repay |
Note the count starts from the April you first became due to repay, not from graduation and not from when you first actually paid anything. Plan 5's 40 years is the change that matters most: a graduate who starts repaying in their early twenties will be carrying it into their sixties.
Loans are also written off on death, and in cases of permanent disability that leaves you unable to work.
How the Deduction Is Actually Calculated
Three mechanics that explain most of the confusion people have with their payslips.
It is worked out per pay period. Payroll compares that month's pay against the monthly threshold. If you have an unusual month, say a bonus, you repay 9% of everything above £2,448.75 in that month alone, even if your total for the year comes to less than the annual threshold.
It comes out of gross pay, but it is not a tax. The deduction is calculated on your pre-tax earnings, so it is not reduced by your personal allowance. Salary sacrifice does reduce it, because it reduces gross pay before the calculation happens.
Unearned income has a cliff edge. Through PAYE the calculation is on your earnings from employment, using the same gross figure your employer uses for National Insurance. If you also have unearned income such as savings interest or dividends, it is excluded until it exceeds £2,000 in the year. Once it does, the whole amount counts, not just the part above £2,000, and it comes into the calculation through Self Assessment. That step is worth watching if you have a side income hovering near the line.
If You Have Two Loans
An undergraduate loan and a Postgraduate Loan are separate and are both collected. The percentages stack rather than replace each other: 9% above the undergraduate threshold plus 6% above £21,000.
On £35,000 with a Plan 2 undergraduate loan and a Postgraduate Loan, that is £42.11 plus £70.00, so £112.11 a month. On £45,000 it is £237.11 a month. That combined figure is what a mortgage lender will treat as a committed monthly expense, which is why it is worth knowing before you apply for anything.
What Is Changing
The Budget of 26 November 2025 froze the Plan 2 repayment threshold at £29,385 for three years from 6 April 2027, covering 2027-28 to 2029-30. A frozen threshold in a period of rising wages is a repayment increase in everything but name: each year your pay rises, more of it sits above a line that has not moved.
The Plan 2 interest taper points were frozen alongside it, which was not set out in the Budget documents and only came to light through scrutiny afterwards. The practical effect is that graduates reach the 6% end of the taper at a lower real salary each year.
The other plans were not frozen. Plan 1 has already been announced as rising to £28,005 for 2027/28.
Check What Your Payslip Says
Employers get plan types wrong regularly, usually because a starter checklist was filled in from memory. Being put on the wrong plan can mean paying too much for years, and it is refundable when you spot it.
Look at your payslip, confirm which plan it says, and check it against the rules above. Then put your own salary into our student loan calculator to see what the deduction should be. If the two do not match, that is a conversation with payroll worth having this month rather than next April.