The short answer
- You repay 9% of income above £25,000. On £30,000 that is £37.50 a month.
- Interest is RPI only: 4.1% from September 2026, whatever you earn.
- The threshold is £25,000 until April 2027, then rises with inflation.
- Any balance left after 40 years is written off.
Who is on Plan 5
Students from England who started an undergraduate course, or a Postgraduate Certificate in Education, on or after 1 August 2023 are on Plan 5. Students who started before then stay on Plan 2, even if they begin a new course later. Welsh students remain on Plan 2, Scottish students on Plan 4 and Northern Irish students on Plan 1.
When repayments start
- During your courseInterest is added
No repayments while studying.
- The April after you leaveRepayments can start
Only if your income is over £25,000.
- April 2026First Plan 5 repayments
For graduates of three-year courses that started in 2023.
How much you repay
- Income above the threshold: £30,000 − £25,000£5,000
- Repayment at 9%£450 a year
Interest at inflation only
Plan 5 interest is set at the Retail Prices Index from the previous March, with no extra percentage. From 1 September 2026 to 31 August 2027 it is 4.1% for everyone, while studying and after. This means the balance grows in line with inflation rather than faster, which is one of the main changes from Plan 2.
What you are likely to repay in total
| Starting salary | Total repaid | Written off | Cleared? |
|---|---|---|---|
| £25,000 | £0 | £164,844 | No |
| £30,000 | £33,931 | £107,837 | No |
| £45,000 | £81,051 | £0 | Yes, after 29 years |
| £60,000 | £66,142 | £0 | Yes, after 17 years |
Higher earners clear the loan sooner and pay less interest overall, so a middle earner who just clears it in the final years can repay the most. Figures are in cash terms over many years and are not adjusted for inflation.
The 40-year write-off
Plan 5 loans are written off 40 years after the April you were first due to repay, ten years longer than Plan 2. Someone who graduates at 21 could be repaying until their early sixties. The longer period means far more graduates are expected to repay in full than on Plan 2.
How Plan 5 differs from Plan 2
- Threshold
- £25,000
- Interest
- RPI only
- Write-off
- 40 years
- Threshold
- £29,385
- Interest
- RPI to RPI + 3% (6% cap in 2026/27)
- Write-off
- 30 years
On £35,000, a Plan 5 graduate repays £75 a month, against £42.11 on Plan 2.
Tuition fees and maintenance loans
Tuition fees in England are £9,790 a year for 2026/27, and are due to rise with inflation in later years. The maximum maintenance loan for a student living away from home outside London is £10,830. A three-year course with full loans can leave a balance of over £60,000 including interest. The maintenance loan calculator shows what you can borrow for living costs.
How it feels in your payslip
Above £25,000, a basic-rate taxpayer keeps 63p of each extra pound earned, after 20% income tax, 8% National Insurance and 9% student loan. Pension contributions through salary sacrifice reduce the income used for repayments, so they save 9% as well as tax and National Insurance.
Should you overpay?
Overpaying can save interest if you are sure to clear the loan, which is more likely on Plan 5 than Plan 2. But it ties up money you cannot get back. In the £30,000 example, an extra £100 a month raises the total repaid from £33,931 to £81,931 and still leaves £17,356 written off. Build an emergency fund and clear dearer debts first.
Run your own numbers
Use the calculator with your salary and balance. Small changes to assumed pay rises change the answer a lot over 40 years.
Self-employed, abroad and other income
Self-employed graduates repay through Self Assessment. Unearned income over £2,000, such as savings interest or rent, also counts. If you move abroad for more than three months, tell the Student Loans Company; repayments are then based on thresholds for your new country.
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.
Above the threshold, a basic-rate taxpayer keeps about 63p of each extra pound earned, after 20% income tax, 8% National Insurance and 9% in student loan repayments. A higher-rate taxpayer keeps about 49p.
Plan 5 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 5 repayment is £75 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 | £25,000 |
| Monthly | £2,083.33 |
| Weekly | about £480 |
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%£2,050
- Repaid through your pay£450
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 5 threshold of £25,000.
- 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.
What 40 years of repayments means
A graduate who starts repaying at 22 could still be repaying at 62. Over that time, salaries usually rise, so repayments grow too. On the example assumptions, someone starting on £45,000 repays for 29 years before clearing the loan, while someone starting on £30,000 repays for the full 40 years and still has some written off.
It helps to think of Plan 5 as a graduate tax of 9% above the threshold for much of your working life, rather than a debt to pay off as fast as possible.
Thinking about university costs
The loan system means you never have to pay fees upfront, and repayments are always linked to what you earn. When choosing a course, the cost matters less than whether it leads to work you want. Living at home can cut what you borrow, as the maximum loan for living with parents is £9,118 rather than £10,830, though you will repay according to your income either way.