Plan 1 Student Loans Explained
Plan 1 applies to students who started their courses before September 2012 in England and Wales, or who received loans from Scotland or Northern Ireland.
Threshold
£26,065
per year
Repayment Rate
9%
above threshold
Interest Rate
3.2%
current rate
Write-off
25 years
Calculate Your Plan 1 Repayments
See your monthly payments and when you'll clear your loan
Who Has a Plan 1 Loan?
You have a Plan 1 loan if:
- You started an undergraduate or postgraduate course in England or Wales before 1 September 2012
- You started an undergraduate or postgraduate course in Northern Ireland
- You started an undergraduate or postgraduate course in Scotland before 1 September 1998
ℹ️Note
Scottish students who started from September 1998 onwards are typically on Plan 4, not Plan 1.
How Plan 1 Repayments Work
Plan 1 repayments are collected through the UK tax system. Your employer automatically deducts repayments from your salary each month.
Repayment Calculation
You pay 9% of everything you earn above £26,065 per year (£2,172 per month).
Example:
If you earn £35,000/year, your monthly repayment would be:
(£35,000 - £26,065) × 9% ÷ 12 = £67/month
Interest Rate
Plan 1 has a relatively favourable interest rate compared to other plans.
Interest is the lower of:
- Retail Price Index (RPI)
- Bank of England base rate + 1%
The current Plan 1 interest rate is approximately 3.2% (as of December 2024).
When Is the Loan Written Off?
Plan 1 loans are written off after 25 years from the April after you left your course (or turned 65, whichever comes first).
💡Important
If you took out your loan before 2006, your loan may be written off when you reach 65, or 25 years after the April you were first due to repay — whichever comes first.
Should You Overpay Your Plan 1 Loan?
With Plan 1's lower interest rate, overpaying can sometimes make sense — especially if you have a high salary and will likely repay in full anyway.
✓ Consider Overpaying If:
- You'll repay in full before write-off
- You have a high, stable income
- You have no other debts
- You've maxed pension contributions
✗ Maybe Don't If:
- Loan will be written off anyway
- You have higher-interest debt
- No emergency savings
- Not fully funding your pension