UK Student Loan Plans Explained (2025 Update)
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Why Your Student Loan Plan Matters
Understanding which UK student loan plan you're on is fundamental to managing your repayments effectively. Each plan – whether it's Plan 1, Plan 2, Plan 4, Plan 5, or a Postgraduate Loan – has distinct terms for repayment thresholds, interest rates, and how long you'll repay. This comprehensive guide breaks down each plan to help you make sense of your student finance journey.
How is Your Student Loan Plan Determined?
Your student loan plan is primarily determined by two factors:
- When you started your course: The academic year you began your studies is the main differentiator.
- Where you were living when you applied for student finance: This determines if you fall under Student Finance England, Wales, Northern Ireland (SFNI), or the Student Awards Agency Scotland (SAAS).
It's possible to be on more than one plan if, for example, you took an undergraduate loan and later a postgraduate loan.
Plan 1 Student Loans In-Depth
Plan 1 loans generally apply to students from England or Wales who started their undergraduate course before 1 September 2012, or students from Northern Ireland who started before 1 September 2006.
Key Features of Plan 1:
- Repayment Threshold (2024/25): You start repaying once you earn over £26,065 a year, £2,172 a month, or £501 a week.
- Repayment Percentage: You repay 9% of your income above the threshold.
- Interest Rate: This is the lower of either the Retail Prices Index (RPI) or the Bank of England base rate plus 1%. It can change annually.
- Write-Off Period:
- If your first student loan was for an academic year beginning on or after 1 September 2006 (England/Wales) or 2007 (NI): Loan is written off 25 years after the April you were first due to repay.
- If your first student loan was for an academic year beginning before then: Loan is written off when you turn 65.
Plan 1 loans typically have lower interest rates compared to newer plans.
,Plan 2 Student Loans In-Depth
Plan 2 loans apply to most students from England or Wales who started their undergraduate course on or after 1 September 2012 and before 1 August 2023.
Key Features of Plan 2:
- Repayment Threshold (2024/25): You repay once you earn over £28,470 a year, £2,372 a month, or £547 a week.
- Repayment Percentage: You repay 9% of your income above the threshold.
- Interest Rate: While studying, the rate is typically RPI + 3%. After your
course, the rate depends on your income:
- Earning £28,470 or less: RPI.
- Earning between £27,296 and £49,130: RPI plus a tapered rate up to 3%.
- Earning over £49,130: RPI + 3%.
- Write-Off Period: The loan is written off 30 years after the April you were first due to repay.
Plan 2 loans can accrue interest more quickly than Plan 1 due to the potentially higher RPI + 3% rate.
Plan 5 Student Loans In-Depth (New System)
Plan 5 loans are the newest type, applying to students from England starting an undergraduate course on or after 1 August 2023. Students from Wales starting from this date may also be on a similar new Welsh plan.
Key Features of Plan 5:
- Repayment Threshold (from 2023/24): You repay once you earn over £25,000 a year, £2,083 a month, or £480 a week.
- Repayment Percentage: You repay 9% of your income above the threshold.
- Interest Rate: The interest rate is linked to the Retail Prices Index (RPI) only. It does not include an additional percentage based on income.
- Write-Off Period: The loan is written off 40 years after the April you were first due to repay.
Key differences from Plan 2 include a lower starting repayment threshold, a simpler interest rate linked only to RPI, and a longer 40-year repayment term.
Plan 4 Student Loans (Scottish Students)
Plan 4 loans are for undergraduate or postgraduate students from Scotland who received funding from the Student Awards Agency Scotland (SAAS), or EU students studying in Scotland.
Key Features of Plan 4:
- Repayment Threshold (2024/25): You repay once you earn over £32,745 a year, £2,728 a month, or £629 a week.
- Repayment Percentage: You repay 9% of your income above the threshold.
- Interest Rate: Typically set at a specific percentage, often lower than Plan 2 rates. (e.g., it has been 1.5% or similar recently, but check SAAS for the current rate).
- Write-Off Period: Generally 30 years after you become eligible to repay, or age-related conditions for older loans.
Postgraduate Loans (England, Wales, NI)
Postgraduate loans are available for Master's and Doctoral study for students from England, Wales, and Northern Ireland (Scotland has its own system via SAAS for postgraduate funding).
Key Features of Postgraduate Loans:
- Repayment Threshold (2024/25): You repay once you earn over £21,000 a year, £1,750 a month, or £403 a week.
- Repayment Percentage: You repay **6%** of your income above the threshold (this is different from the 9% for undergraduate loans).
- Interest Rate: Typically RPI + 3%.
- Write-Off Period: Usually 30 years after you become eligible to repay.
- Concurrent Repayment: If you have a Postgraduate Loan and an undergraduate loan (e.g., Plan 2), you repay both simultaneously if your income is above both respective thresholds. You'd pay 6% on income above the PG threshold AND 9% on income above the undergraduate threshold.
Loan Plan Quick Comparison (2024/25 Estimates)
Note: Thresholds and interest rates can change annually. Always check official sources for the most current figures. This table provides a general overview.
| Feature | Plan 1 | Plan 2 | Plan 4 (Scotland) | Plan 5 | Postgraduate (Eng/NI/Wal) |
|---|---|---|---|---|---|
| Applies To (Generally) | Before Sep 2012 (Eng/Wal), before Sep 2006 (NI) | Sep 2012 - Jul 2023 (Eng/Wal) | Scottish students (SAAS), EU in Scotland | From Aug 2023 (Eng) | Master's/Doctoral (Eng/NI/Wal) |
| Annual Repayment Threshold | £26,065 | £28,470 | £32,745 | £25,000 (frozen) | £21,000 |
| Repayment % Above Threshold | 9% | 9% | 9% | 9% | 6% |
| Interest Rate Basis | Min(RPI, BoE+1%) | RPI + up to 3% (income tiered) | Fixed % (check SAAS) | RPI only | RPI + 3% (often capped) |
| Write-Off Period | 25 years or age 65 | 30 years | ~30 years or age conditions | 40 years | 30 years |
How Do I Know Which Plan(s) I'm On?
The easiest way to confirm your student loan plan(s) and current details is to:
- Log in to your online repayment account via the Student Loans Company (SLC) portal on GOV.UK.
- Check your annual student loan statements sent by the SLC.
- If you are a Scottish student, check your SAAS account.
These sources will provide the most accurate information specific to your circumstances.
Planning with Your Loan Type in Mind
Knowing the specifics of your student loan plan(s) is the first step towards effective financial planning. It influences how much you'll repay each month, how much interest you might accrue, and whether overpayments are a sensible strategy for you. Use this knowledge when you use our student finance calculator to get a clearer picture of your long-term repayment journey.