How much you repay
How much you repay depends on which plan you’re on.
Each plan has a threshold for your weekly or monthly income. You pay 9% of the amount you earn over the threshold.
You do not pay anything back if your income is under the threshold.
Interest starts being added to your loan from when you get your first payment.
The thresholds are £352 a week or £1,527 a month (before tax and other deductions). They change on 6 April every year.
You’re on Plan 1 if you’re:
- an English or Welsh student who started your undergraduate course before 1 September 2012
- a Scottish or Northern Irish student
You’re paid monthly and your income changes each month. This month your income was £2,000, which is over the Plan 1 monthly threshold of £1,527.
Your income was £473 over the threshold (£2,000 minus £1,527). You will pay back £42 (9% of £473) this month.
Your annual income is £27,000 and you’re paid a regular monthly wage. This means that each month your income is £2,250 (£27,000 divided by 12). This is over the Plan 1 monthly threshold of £1,527.
Your income is £723 over the threshold (£2,250 minus £1,527). You will pay back £65 (9% of £723) each month.
Interest on Plan 1
You currently pay interest of 1.5% on Plan 1. You can find interest rates for previous years.
The thresholds are £480 a week or £2,083 a month (before tax and other deductions).
You’re on Plan 2 if you’re an English or Welsh student who started your undergraduate course on or after 1 September 2012.
You’re paid weekly and your income changes each week. This week your income was £600, which is over the Plan 2 weekly threshold of £480.
Your income was £120 over the threshold (£600 minus £480). You will pay back £10 (9% of £120) this week.
Your annual income is £28,800 and you are paid a regular monthly wage. This means that each month your income is £2,400 (£28,800 divided by 12). This is over the Plan 2 monthly threshold of £2,083.
Your income is £317 over the threshold (£2,400 minus £2,083). You will pay back £28 (9% of £317) each month.
Interest on Plan 2
While you’re studying, interest is inflation plus 3%.
Once you’ve left your course, your interest rate depends on your income in the previous tax year.
If you’re self-employed, your income is the total income amount on your Self-Assessment form.
If you’re an employee, your income is your taxable pay:
- plus any pension contributions
- minus any benefits you get from your employer that are taxed through payroll (ask your employer if you’re not sure)
If you have more than one job in a year, your interest rate will be based on your combined income from all your jobs.
|Your annual income||Interest rate|
|£25,000 or less||Inflation|
|£25,000 to £45,000||Inflation plus up to 3%|
|Over £45,000||Inflation plus 3%|
The Student Loans Company has more information on how they calculate interest.
If your income changes during the year
You can apply for a refund if you make repayments but your total annual income (from 6 April to 5 April the following year) is less than:
- £18,330 a year for Plan 1
- £25,000 a year for Plan 2
If you have Plan 1 and Plan 2 loans
You pay back 9% of your income over the Plan 1 threshold (£352 a week or £1,527 a month).
If your income is under the Plan 2 threshold (£480 a week or £2,083 a month), your payments only go towards your Plan 1 loan.
If your income is over the Plan 2 threshold, your payments go towards both your loans.
If you have 2 or more jobs
Your employers will deduct repayments from your salary - but only for the jobs where you earn over the minimum amount.
HMRC may send you a tax return to make a self assessment of the repayments you owe for the whole year. You’ll need to pay 9% of all your income over the threshold - but any repayments you’ve already made from your salary will be deducted from this.
Keep all your payslips and P60 - you’ll need them if you claim a refund.
You might end up paying your loan back sooner if your income from savings and investments is over £2,000 a year.