Postgraduate Loans Explained
Postgraduate loans help fund Master's degrees and Doctoral research. They have different repayment terms than undergraduate loans, including a lower threshold and repayment percentage.
Threshold
£21,000
per year
Repayment Rate
6%
above threshold
Interest Rate
~6.2%
RPI + 3%
Write-off
30 years
Types of Postgraduate Loans
📚 Master's Loan
For postgraduate Master's courses
- Up to £12,471 (2024/25)
- Available in England and Wales
- One-year or two-year courses
🎓 Doctoral Loan
For PhD and other doctoral degrees
- Up to £29,390 over course (2024/25)
- Available in England and Wales
- Typically 3-4 year courses
Both loan types follow the same repayment rules: 6% of earnings above £21,000.
The 6% Rule — Different from Undergrad
The most important difference: postgraduate loans charge only 6% of earnings above the threshold, not 9%.
Repayment Calculation
You pay 6% of everything you earn above £21,000 per year.
Example:
If you earn £40,000/year, your monthly PG loan repayment would be:
(£40,000 - £21,000) × 6% ÷ 12 = £95/month
Lower threshold too: The £21,000 threshold is lower than Plan 2 (£28,470) or Plan 5 (£25,000), so you start repaying sooner.
Having Both UG and PG Loans
If you have both an undergraduate loan (Plan 2 or Plan 5) AND a postgraduate loan, you'll repay both simultaneously, but they're calculated separately.
Combined Repayment Example
If you earn £45,000 with both Plan 2 and a Postgraduate loan:
Interest Rate
Postgraduate loans charge interest at RPI + 3% — the same maximum rate as Plan 2, regardless of income.
Current postgraduate loan interest: approximately 6.2%
Unlike Plan 2 (which varies by income), PG loans always charge the maximum rate from day one.
Watch out: Interest accrues while you're studying and before you start repaying. Your balance may already be higher than you borrowed when you graduate.
When Is the Loan Written Off?
Postgraduate loans are written off 30 years after the April following graduation (or leaving your course).
This is the same as Plan 2 undergraduate loans, so if you have both, they'll be written off at different times (based on when you finished each course).
Is a Postgraduate Loan Worth It?
The answer depends on your career plans and financial situation:
✓ Good Reasons to Take It
- Career requires a Master's/PhD
- Significant salary boost expected
- Don't have savings to self-fund
- Low-risk — only repay if earning
⚠ Consider Carefully If:
- Career doesn't require postgrad
- Expected salary is modest
- Already have high UG debt
- Could fund through employer/scholarship
Remember: unlike undergraduate loans, taking a postgraduate loan is optional. Consider whether the qualification will genuinely boost your earning potential.
Alternatives to Postgraduate Loans
Before taking a government postgraduate loan, explore these options:
- Scholarships & bursaries: Many universities offer funding for postgraduate study
- Employer sponsorship: Some employers will fund relevant qualifications
- Research council funding: For PhDs in certain fields (covers fees + stipend)
- Part-time study: Work while studying to reduce borrowing
- Professional development loans: Sometimes available for vocational courses