All figures below are the published GOV.UK rates and thresholds in force on 27 July 2026, for the 2026-27 tax year. General information, not personal financial advice.
Many graduates log into the Student Loans Company years after leaving university and find the balance has gone up, with interest added. The natural response is to want to clear it.
For many borrowers, overpaying costs money they do not get back. A UK student loan is a payroll deduction with an end date, unlike a credit card, car loan or mortgage.
What you pay each month
Your repayment has nothing to do with the size of your balance. It is a fixed percentage of the slice of your income above a threshold, taken through PAYE alongside tax and National Insurance. Someone with £12,000 outstanding and someone with £60,000 outstanding, on the same salary and the same plan, pay exactly the same amount every month.
| Plan | Who is on it | Threshold | Rate above | Written off |
|---|---|---|---|---|
| Plan 1 | England and Wales, course started before September 2012; all Northern Ireland | £26,900 a year £2,241 a month | 9% | 25 years |
| Plan 2 | England and Wales, course started September 2012 to July 2023 | £29,385 a year £2,448 a month | 9% | 30 years |
| Plan 4 | Scotland | £33,795 a year £2,816 a month | 9% | 30 years |
| Plan 5 | England, course started on or after 1 August 2023 | £25,000 a year £2,083 a month | 9% | 40 years |
| Postgraduate | Master's and doctoral loans, England and Wales | £21,000 a year £1,750 a month | 6% | 30 years |
Thresholds and rates from GOV.UK for the 2026-27 tax year. The clock on the write-off starts in the April you were first due to repay, which is the April after you left your course. Plan 1 loans taken before 1 September 2006 are written off at 65 instead; Plan 4 loans taken before 1 August 2007 at 65 or after 30 years, whichever comes first.
Put a real salary through it. On £34,000, with the deduction worked out on your monthly pay and rounded down to the whole pound, you would see:
- Plan 1 — £53 a month. £639 over the year.
- Plan 2 — £34 a month. £415 over the year.
- Plan 4 — £1 a month. £18 over the year, because the Scottish threshold is only £205 below that salary.
- Plan 5 — £67 a month. £810 over the year.
- Postgraduate — £65 a month. £780 over the year, and it stacks on top of your undergraduate plan. Plan 2 plus a postgraduate loan on £34,000 is £99 a month.
That deduction is what the loan costs you this year, whatever the balance or interest. To see the same deduction on your own payslip and understand every other line next to it, our guide to reading your payslip explains it.
The write-off date
Every plan has an end date, and on that date whatever is left is cancelled.
The Department for Education publishes a forecast of how many borrowers will ever clear their loans. In its student loan forecasts for England published on 9 July 2026, it expects 55% of full-time undergraduate borrowers starting in the 2025/26 academic year to repay in full — up sharply from 32% of the 2022/23 cohort, because Plan 5 runs for forty years at a lower threshold. On the 2022/23 figure, roughly two in three borrowers are forecast not to clear the balance; their loan ends at the write-off date.
Overpayments are not refundedVoluntary extra repayments cannot be reversed. NIdirect states: the Student Loans Company does not refund voluntary payments unless you have finished repaying the loan and they turn out to be genuine overpayments. Money you put in cannot come back out for a house deposit, a redundancy or a bad year of self-employment.
The interest rate
As at 27 July 2026, GOV.UK gives the rates as 3.2% on Plan 1, Plan 4 and Plan 5, and 6.2% on a Postgraduate Loan. Plan 2 uses a sliding scale tied to income: 3.2% if you earn £29,385 or less, rising gradually to 6.2% once you earn £52,885 or more. The government has capped Plan 2 and postgraduate interest at 6% for the academic year running from 1 September 2026 to 31 August 2027.
If your balance is not going to be cleared, the interest rate changes the balance on the statement but not your monthly deduction by a single penny, because that deduction is set by your salary and your plan, not by what you owe. The rate affects what you pay only if you are on track to clear the balance.
Worked example: two graduates with the same balance
Both of these are illustrative. Both are on Plan 2 with £48,000 outstanding, both were first due to repay in April 2021, so both loans are written off in April 2051.
The first graduate earns £34,000. Her statutory repayment is 9% of the £4,615 above the threshold: £415 for the year. Her income sits low in the sliding interest band, so her rate is around 3.8%, and interest on £48,000 comes to about £1,824. Her balance therefore rises by roughly £1,409 in the year. Suppose she decides to fight it with £100 a month. That is £1,200 a year, £30,000 over the 25 years left to her write-off date — and even then, £1,200 plus her £415 does not cover the £1,824 of interest, so the balance still climbs in year one. The £30,000 would not reduce what she was ever going to pay.
The second graduate earns £75,000 and expects to be over £100,000 within five years. His statutory repayment is 9% of the £45,615 above the threshold: £4,105 for the year. He is in the top interest band, so 6.2% on £48,000 is £2,976. His balance falls by £1,129 in year one, and will fall faster every year as the balance shrinks and his pay rises. He may clear it well before 2051, so an overpayment would reduce the interest he pays.
The difference between them is expected income, not the size of the debt.
Four questions
Work through these in order. Overpaying only reduces what you pay if all four answers are yes.
- Do you know your plan and your write-off date? Take the April you were first due to repay and add 25, 30 or 40 years depending on the table above. Write the actual date down.
- Is your balance falling? Your annual statement shows repayments made and interest added. If interest is the bigger number, your balance is growing under the statutory schedule.
- Will your income clear it in time? A rough test: multiply this year's repayment by the years left before write-off. If that total is comfortably above your balance, you are on track. If it is a fraction of it, you are not.
- Have you considered other uses for the money? For example an emergency fund, other debts, pension contributions or a mortgage.
Other uses for spare money
If the answers are no, these are other common uses for spare money. Which comes first depends on your circumstances; for pension, mortgage or debt decisions, a regulated adviser or free debt adviser can help.
- An emergency fund. MoneyHelper's guidance is three to six months of essential outgoings in an instant-access account. Work out your own number with the survival budget calculator, then size the pot with the emergency fund calculator.
- Expensive debt. A credit card at 24% works differently from a student loan at 3.2% that is written off. StepChange, National Debtline and MoneyHelper give free debt advice. The debt payoff calculator shows how long balances take to clear.
- Employer pension contributions. Auto-enrolment minimums are 8% of qualifying earnings between £6,240 and £50,270, of which your employer must put in at least 3%. Some employers match more than the minimum if you increase your own contribution. Our pension reality check covers what the pot needs to look like.
- Mortgage overpayments. A mortgage is secured on your home and is not written off. Overpaying reduces the interest you pay, subject to any early repayment charges.
Four facts to check
- Sign in to your student loan repayment account on GOV.UK and write down your plan number and your current balance.
- Find the April you were first due to repay, add 25, 30 or 40 years, and write the write-off date on the same piece of paper.
- From your annual statement, note repayments made and interest added last year. Subtract one from the other. The result shows whether the balance is going up or down.
- Multiply last year's repayment by the years remaining. Compare it with the balance.
If the balance is rising and the total comes nowhere near it, the loan is likely to be written off before it is cleared.
Where to check the official positionThresholds, interest rates and write-off rules are published at GOV.UK: repaying your student loan, and your own balance and statements are in your account at GOV.UK: manage your student loan balance. For free, impartial money guidance backed by government, use MoneyHelper. The Plan 2 threshold is frozen at £29,385 for three years from April 2027, announced at the Autumn Budget 2025 and set out in the House of Commons Library briefing on student loan thresholds.
Where coaching fits
Buzz Money Coach helps you get the facts straight and put the numbers in order. Coaching is not regulated financial advice, and we do not recommend pensions, investments or mortgages. Where a decision needs a regulated adviser we say so, and can introduce you to Equity & General, authorised and regulated by the FCA (No. 474163) — optional, with no obligation, and they pay us a commission if you proceed. If you are weighing up which kind of help you need, our guide on coaches and advisers sets out the difference.
If you want a clear picture of where the student loan sits among everything else, the free Financial Freedom Score takes about seven minutes and names one next step. If you would rather have the whole thing written down and sequenced, that is what the Plan is for.