In this article, we look at how student loans work, how to repay your student loan and when your student loan is written off. We also look at whether it is worth overpaying your student loan to clear your debt sooner. For a more in-depth explanation of how student loans work and how to apply, read our article, ‘Student debt: What you need to know about repaying your student loans‘.
Additional money-saving tips for students can be found in our articles:
- Best student bank accounts
- How to save money as a student
- Top 10 essential money-saving tips for students
1 minute summary
- A student loan is usually comprised of two loans; one covers your university tuition fees and one is for your living costs during your time at university.
- How much you can get will depend on your individual circumstances as well as the course you are studying and where you live in the UK.
- You will need to repay at least some of your student loan, but how much you repay depends on the plan you are on and how much you earn in a year before tax.
- When you started your university course affects which student loan plan you are on. Your student loan plan also affects when your student loan is written off. More information can be found here.
- For additional information on student loans and how much needs repaying, visit our article, ‘Student debt: What you need to know about repaying your student loans‘.
How do student loans work?
A student loan can be applied for by those in full or part-time education in the UK. There are two main types of student loans in the UK, a tuition fee loan and a maintenance loan. The tuition fee loan is designed to cover the costs of your university tuition fees and is paid by the government directly to your university. The maintenance loan can help contribute towards your living costs but is means-tested and how much you can get will depend on your family's household income.
You need to start repaying your student loans, plus any interest accrued, once you have finished your studies and you are earning over the income threshold. How much you need to earn before making repayments is determined by your student loan plan. More information on how much you have to repay can be found here. If you would like to know how much you can borrow for a university course starting in the 2023/2024 or 2024/2025 academic years, visit the government's Student Finance Calculator.
Student loan plans explained
How much you have to repay on your student loan depends on your student loan plan. We briefly summarise each plan type below. For a more detailed explanation of how much you need to pay, read our article, ‘Student debt: What you need to know about repaying your student loans‘.
What is my student loan plan?
The following table explains which student loan plan you will have depending on when you went to university and where you were living when you applied for your student finance. If you are unsure which plan you are on, you can double-check on the government website.
| Student Finance application location | You started university before 1st September 2012 | You started university between 1st September 2012 and 31st July 2023 | You started university on or after 1st August 2023 |
| England | Plan 1 | Plan 2 | Plan 5^ |
| Wales | Plan 1 | Plan 2 | Plan 2 |
| Northern Ireland | Plan 1 | Plan 1 | Plan 1 |
| Scotland | Plan 4 | Plan 4 | Plan 4 |
^You’ll be on Plan 2 if you take out a Higher Education Short Course Loan.
Student loan plans for postgraduate students
Postgraduate students who applied to Student Finance England or Wales for a course that started before 1st September 2012 will be on Plan 1.
If you studied a PGCE on or after 1st September 2012 funded by Student Finance England or Wales, you will be on Plan 2 unless your course started with Student Finance England on or after 1st August 2023, in which case you will be on Plan 5.
If you're studying a postgraduate masters or doctoral course funded by Student Finance England or Wales, you will be on a Postgraduate Loan Plan.
Postgraduate students that applied to Student Awards Agency Scotland are on Plan 4 and postgraduates that applied to Student Finance Northern Ireland are on Plan 1. More information on the different plan types and the dates on when your course started can be found here.
How much of my student loan do I need to repay?
You only need to begin student loan repayments once your income (before tax) is over your repayment plan threshold. If you are not working, or your income drops below the threshold, your payments should automatically stop.
If you leave your course early, you will still be required to repay your student loan, but how much you will have to pay will depend on your individual circumstances.
As long as your income is over the repayment plan threshold, the earliest you can start to repay your loan is:
- The April after you leave your course
- The April 4 years after the course started (if you’re part-time or studying a Post-graduate Doctoral course that is longer than 4 years)
- April 2026 for those on Plan 5
What are the student loan repayment plan thresholds?
If your income is above the threshold for your repayment plan, anyone on Plan 1, 2, 4 or 5 will pay 9% of their income earned over the threshold. Postgraduate Loan plan holders will pay 6% of their income over the threshold. You will also be charged interest on your student loan amount and how much interest you are charged depends on your plan type.
The following table shows the weekly, monthly and yearly thresholds for each plan. For examples of how much you can expect to pay each month, read our article, ‘Student debt: What you need to know about repaying your student loans’.
Student loan repayment plan income thresholds
| Plan Type | Weekly threshold amount | Monthly threshold amount | Yearly threshold amount |
| Plan 1 | £480 | £2,082 | £24,990 |
| Plan 2 | £524 | £2,274 | £27,295 |
| Plan 4 | £603 | £2,616 | £31,395 |
| Plan 5 | £480 | £2,083 | £25,000 |
| Postgraduate Loan Plan | £403 | £1,750 | £21,000 |
Student loan repayment plan interest charges
| Plan Type | Interest charged |
| Plan 1 | 6.25% |
| Plan 2 | 8% |
| Plan 4 | 6.25% |
| Plan 5 | 8% |
| Postgraduate Loan Plan | 8% |
How to repay your student loan
You will usually automatically start repaying your student loan once your income exceeds the threshold for your repayment plan type. If you are employed, the amount you owe is deducted from your salary at the same time as your tax and National Insurance.
If you are self-employed, HMRC will work out how much you pay from your tax return and this must be paid at the same time as when your tax is due.
When do student loans get written off?
When your repayment plan gets written off depends on your repayment plan type and when you were paid the loan. We have summarised the differences in the table below.
| When is the student loan written off? | |
| Plan 1 | Loans paid before 01/09/2006 – Loan will be written off when you are 65
Loans paid on or after 01/09/2006 – Loan will be written off 25 years after the April you were first due to repay |
| Plan 2 | 30 years after the April you were first due to repay |
| Plan 4 | Loans paid before 01/08/2007 – Loan will be written off either when you’re 65 or 30 years after the April you were first due to repay (whichever is first)
Loans paid on or after 01/08/2007 – Loan will be written off 30 years after the April you were first due to repay |
| Plan 5 | Loan will be written off 40 years after the April you were first due to repay |
| Postgraduate Loan Plan | England or Wales – Loan will be written off 30 years after the April you were first due to repay
Northern Ireland – Same as those on Plan 1 Scotland – Same as those on Plan 4 |
What happens to your student loan if you die, fall ill or are unable to work?
If you die your student loan will be cancelled by the Student Loans Company (SLC) but proof will be required (such as a death certificate) as well as the student loan reference number.
If you are unable to work due to illness or disability you may be able to have your student loan repayments cancelled but you will need to provide evidence of eligible benefits.
Is it worth overpaying my student loan?
If you are concerned about repaying your student loan you may be wondering if it is worth making overpayments to repay your loan more quickly. If you do decide to make any overpayments to your student loan you will not be penalised for doing so but it is advisable to consider your other options before making an overpayment.
If you do not earn enough to repay your loan in full through the minimum deductions, it will be written off after a number of years. Exactly how long will depend on your loan plan. If you choose to overpay a set amount each year, but still do not clear the debt by the write off date, that extra money will have been wasted. The only instance where it would be financially beneficial to overpay would be if you are set to clear your debt well before it is written off. Overpaying would then reduce the number of years your debt has to grow with interest.
For most people, it is better to put any spare money you have towards clearing a high-interest credit card or loan that can help to reduce your monthly outgoings. Additionally, is it possible for you to save or invest your money and earn more in interest than what you would benefit in paying off your student loan? If you have any debt that needs to be repaid or wish to save your money in a high-interest savings account, check out these articles for further information:
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