Student loan repayments set to change: What you need to know

2 min Read Published: 16 Aug 2021

Student loan repayments set to change: What you need to knowThe Department of Education (DoE) has announced its annual update to the interest rates and repayment threshold for UK tuition fee loans.

Rates are set to drop for many from September, while those on older loan arrangements will see their threshold increase, meaning they will be able to earn more before they have to start repaying their debt.

In this article, we lay out the upcoming changes to tuition fee repayments for each loan plan, including what you can expect from interest rates and how much you can earn before you must start repaying your loan.

Plan 1 loans

For: English and Welsh undergraduate loans for those who started university between 1998 - 2011, and all Northern Irish undergraduate and postgraduate loans since 1998.

Repayment threshold: Currently £19,895/yr; £20,195/yr from 6 April 2022.

Interest rate: 1.1% from 1 September 2021 to 31 August 2022 (up to a maximum of 1.5% if the Bank of England's base rate increases).

Plan 2 loans

For: English and Welsh undergraduate loans for those who started university during or after 2012.

Repayment threshold: Currently £27,295/yr (new repayment threshold yet to be confirmed).

Interest rate while studying: Currently 5.3% until 31 August; 4.2% from 1 September to 30 September; 4.5% from 1 October to 31 August 2022.

Interest rate after studying: Currently dependent on salary, between 2.6% - 5.3%; 1.5% - 4.2% from 1 September to 30 September; 4.5% from 1 October to 31 August 2022.

Postgraduate loans

For: All English and Welsh postgraduate loans.

Repayment threshold: £21,000/yr (new repayment threshold yet to be confirmed).

Interest rate: 4.2% from 1 September 2021 to 30 September 2021; 4.5% from 1 October 2021 to 31 August 2022.

Plan 4

For: All Scottish undergraduate and postgraduate loans for those who started uni during or after 1998.

Repayment threshold: Currently £25,000/yr until April 2022; £25,375/yr from April 2022 (exact date yet to be confirmed).

Interest rate: 1.1% from 1 September 2021 to 31 August 2022 (up to a maximum of 1.5% if the Bank of England's base rate increases).

Pre-1998 loans

For: All student loans beginning before 1998.

Repayment threshold: Currently £30,646/yr; £36,284/yr from 1 September to 31 August 2022.

Interest rate: Currently 2.6%; 1.5% from 1 September to 31 August 2022.

More on student loans

For more details on the ins and outs of student loans, check out our article “Student debt: What you need to know about repaying your student loans”.