The short answer
- You repay 9% of income above £33,795. On £45,000, that is £84.04 a month.
- Interest from September 2026 is 4.1%.
- The threshold rises with RPI each April.
- Loans are written off 30 years after you were first due to repay.
Who has a Plan 4 loan
Plan 4 applies to loans from the Student Awards Agency Scotland (SAAS). In April 2021, all existing Scottish Plan 1 loans moved to Plan 4, so Scottish graduates of any age are on Plan 4. Students who lived in Scotland but took loans from Student Finance England are on the English plans instead.
Why Scottish balances are smaller
Scottish students studying in Scotland have their tuition fees paid by SAAS and do not borrow for them. Their loans are mainly for living costs, so typical balances are a fraction of those in England, often well under £30,000.
How repayments work
- Income above the threshold: £45,000 − £33,795£11,205
- Repayment at 9%£1,008.45 a year
Repayments come out of your pay through PAYE, like tax. On £35,000 they are just £9.04 a month.
Repayments by salary
Interest on Plan 4
Plan 4 interest is the lower of RPI from March and the Bank of England base rate plus 1%. From 1 September 2026 it is 4.1% for everyone, whatever your income.
When will it be paid off?
| Starting salary | Total repaid | Outcome |
|---|---|---|
| £25,000 | £0 | £49,064 written off after 30 years |
| £35,000 | £5,160 | £41,397 written off |
| £45,000 | £28,273 | Cleared after 21 years |
| £60,000 | £23,445 | Cleared after 9 years |
Because the threshold is high and rises with inflation, graduates on modest salaries repay little. Higher earners clear the loan within a decade or two.
When Plan 4 is written off
- Loans taken out from the 2007/08 academic year: 30 years after the April you were first due to repay.
- Older loans: when you turn 65, or 30 years after you were first due to repay, whichever comes first.
- Any loan: if you die or become permanently unable to work.
Plan 4 and Scottish income tax
Scottish taxpayers pay Scottish income tax rates. Between the Plan 4 threshold and about £43,660, the intermediate rate of 21% applies, so each extra pound earned loses 21% in income tax, 8% in National Insurance and 9% in student loan repayments. Above the higher rate threshold, the combined rate is higher still.
Working in England or abroad
- Plan
- Still Plan 4
- Repayments
- Through PAYE as normal
- Tell
- The Student Loans Company
- Repayments
- Direct, using overseas thresholds
Should you pay it off early?
On £45,000 with a £20,000 balance, an extra £100 a month cuts the total repaid from £28,273 to £27,388, saving a little interest. On a lower salary, where the loan would be partly written off, overpaying only reduces the write-off.
Savings first
With interest at 4.1%, building savings and clearing dearer debts usually come first.
How HMRC and the Student Loans Company work together
Your employer works out repayments each pay day from your pay in that period and sends them to HMRC with your tax. HMRC passes the details to the Student Loans Company, which updates your balance. There can be a delay of several weeks before payments show in your online account. At the end of the tax year, your P60 shows the total deducted.
Because repayments are worked out on each pay period, a one-off bonus can trigger a repayment in that month even if your yearly income is below the threshold. If that happens, you can ask for a refund after the tax year ends.
Pensions, salary sacrifice and repayments
Repayments are based on your pay after salary sacrifice, but before other pension contributions. Paying into a pension through salary sacrifice therefore saves 9% in student loan repayments, as well as income tax and National Insurance. Benefits in kind, such as a company car, do not count towards repayments.
For a Scottish taxpayer earning between the Plan 4 threshold and about £43,660, each extra pound loses 21% in income tax, 8% in National Insurance and 9% in repayments, leaving about 62p. Above the Scottish higher rate threshold, about 48p is left.
Plan 4 and mortgages
Student loans do not appear on credit files and do not affect your credit score. Mortgage lenders do count the monthly repayment as an outgoing when working out what you can afford. On £35,000 the Plan 4 repayment is £9.04 a month, which slightly reduces the amount you can borrow. Paying off the loan early just to borrow more is rarely worthwhile, because you lose savings you could have used as a deposit.
Refunds and overpayments
- If your income for the whole tax year was below the threshold but money was taken, you can claim it back.
- If deductions continue after the balance reaches zero, the Student Loans Company refunds the extra automatically or on request.
- Refunds can be claimed for previous tax years, with your P60s as evidence.
Career breaks, illness and death
If you stop working, for parental leave, study or illness, repayments stop when your income falls below the threshold. Interest continues to be added. The loan is cancelled if you become permanently unable to work because of illness or disability, and it is cancelled when you die: it is never passed on to your family.
Checking your balance
Log in to your Student Loans Company online account to see your balance, interest added and payments received. Keep your contact details up to date, and check your payslips show the right plan type. If your employer uses the wrong plan, you could repay too much or too little; tell them and HMRC so they can correct it.
Common mistakes
- Treating the balance like other debt. What you repay depends on your income.
- Using the wrong plan. Check your plan type in your SLC account and on your payslip.
- Forgetting to tell SLC you have moved abroad. This can lead to fixed repayments and higher interest.
- Missing refunds. Check every year that what you paid matches your income.
What counts as income
- Counts: salary, wages, overtime, bonuses and commission, and self-employed profits.
- Counts if over £2,000 a year in total: unearned income such as savings interest, dividends and rent, reported through Self Assessment.
- Does not count: benefits in kind such as a company car, pension income in most cases, and salary given up through salary sacrifice.
If you have two jobs, each employer looks only at its own pay, so you may repay less through PAYE and the rest through Self Assessment.
Thresholds by pay period
| Paid | Threshold |
|---|---|
| Yearly | £33,795 |
| Monthly | £2,816.25 |
| Weekly | about £650 |
Your employer compares the pay in each period with these figures and takes 9% of anything above them. If your pay is uneven, the monthly amounts can vary a lot even though the yearly total is what matters.
Your first year in numbers
- Interest added this year at 4.1%£820
- Repaid through your pay£1,008.45
When interest is more than your repayments, the balance grows even though you are paying. That is normal for income-contingent loans and does not change what you pay each month, which depends only on your income.
Working it out yourself
- Take your yearly income before tax.
- Subtract the Plan 4 threshold of £33,795.
- Multiply what is left by 9%. That is your yearly repayment.
- Divide by 12 for a monthly figure.
The calculator does this for you, adds any Postgraduate Loan, and projects the balance over the years ahead.
SAAS loans and bursaries
Scottish students get help with living costs from the Student Awards Agency Scotland through a mix of loans and non-repayable bursaries, depending on household income. Only the loan part is repaid under Plan 4. Bursaries and grants never have to be repaid, which is another reason Scottish balances are lower.
Studying in England or Wales
Scottish students who study at a university in England, Wales or Northern Ireland can borrow from SAAS for tuition fees there, up to the fee charged. These larger balances are still repaid under Plan 4, with the same threshold and write-off rules, but they take longer to clear.
Planning for the end of repayments
When the loan is cleared, your take-home pay rises by the amount of your repayments: £84.04 a month on £45,000. Check your balance each year as you get close, and think about switching to Direct Debit for the last couple of years, so deductions stop at the right time and you avoid waiting for a refund.
More things to watch
- Assuming you are still on Plan 1. Scottish Plan 1 loans became Plan 4 in 2021; check your payslip shows Plan 4.
- Comparing with English friends. Their thresholds, interest and write-off rules are different.
- Overpaying on a modest salary. If you are unlikely to clear the loan, extra payments mostly reduce the write-off.
Keeping good records
Plan 4 repayments come out through your pay, so it is easy to forget the loan exists. A few minutes each year keeps the balance right and makes refunds easy to claim.
- Keep every P60 and your final payslip from each job, as they show what was taken for your loan.
- Check your online Student Loans Company account once a year against your P60s.
- Keep your address and email up to date, especially if you move abroad, where you repay the Student Loans Company directly.
- Note your plan type and tell a new employer it is Plan 4, so the right threshold is used from your first pay day.