In 2026/27 you repay 9% of everything you earn above your plan's threshold: £26,900 for Plan 1, £29,385 for Plan 2, £33,795 for Plan 4 and £25,000 for Plan 5, plus 6% above £21,000 if you also have a Postgraduate Loan. From April 2027 the Plan 2 threshold is frozen at £29,385 until 2030, and the October 2026 Budget didn't reverse that. To show what this means in practice, we followed three illustrative women through one month's payslip, and then through April 2027.
The 2026/27 student loan rules on one card
| Plan | Annual threshold | Monthly (payroll) | Rate | Interest from 1 Sep 2026 | Written off after |
|---|---|---|---|---|---|
| Plan 1 | £26,900 | £2,241.66 | 9% | 4.1% | 25 years* |
| Plan 2 | £29,385 | £2,448.75 | 9% | 4.1% to 6%, by income | 30 years |
| Plan 4 (Scotland) | £33,795 | £2,816.25 | 9% | 4.1% | 30 years* |
| Plan 5 | £25,000 | £2,083.33 | 9% | 4.1% (RPI) | 40 years |
| Postgraduate Loan | £21,000 | £1,750 | 6% | 6% | 30 years |
Sources: GOV.UK: what you pay; payroll thresholds from HMRC employer guidance; interest from the DfE announcement, 10 Aug 2026; write-off rules from GOV.UK. *Plan 1 loans first paid before 1 Sep 2006 are written off at 65; older Plan 4 loans follow age 65 or 30 years, whichever comes first.
Two things surprise people. First, the repayment depends only on your income, not your balance: a £10,000 loan and a £60,000 loan cost the same each month on the same salary. Second, interest is set separately and keeps running. On Plan 2, the rate rises from 4.1% at £29,385 or less to the 6% cap at £52,885 and above. The government announced that cap on 7 April 2026 for the 2026/27 academic year only (MoneySavingExpert).
Sophie, 31: Plan 2, £32,000 a year, and a balance that keeps growing
ILLUSTRATIVE EXAMPLE · ENGLAND · PLAN 2
Salary: £32,000 · Monthly gross: £2,666.67 · Balance: £45,000 (illustrative)
November payslip: (£2,666.67 − £2,448.75) × 9% = £19.61. Over a full year that's about £235. It's small enough not to notice, and that's the trap.
The interest side: because Sophie earns £2,615 above the threshold, about 11% of the way to the upper limit, her rate is roughly 4.1% plus 0.21%, or 4.31%. On £45,000 that's about £1,940 of interest a year, against £235 repaid. Her balance grows by roughly £1,705 this year even though she pays every month.
April 2027: say Sophie gets a 3.7% pay rise (the latest growth rate in UK average weekly earnings, ONS) to £33,184. With the threshold frozen, she repays £341.91 a year, or £28.49 a month. If the threshold had risen by 4.1% (this year's RPI figure), she'd pay about £233.48. The freeze costs her about £108 more in 2027/28, and the gap widens every year it lasts. The IFS estimates borrowers earning above £30,416 repay an extra £93 in 2027–28, rising to £259 (£22 a month) in 2029–30 (IFS).
Sophie's choice: the MSE Plan 2 guide cites IFS modelling that 83% of English Plan 2 borrowers won't clear their loan within 30 years (MoneySavingExpert). If Sophie is in that group, a growing balance doesn't change what she pays. Only her salary and the threshold do. In practice, this deduction works more like a 9% graduate tax than a debt she's paying down.
On Plan 2, the scary number is the balance. The number that actually costs you money is the threshold.
Leah, 23: Plan 5, £27,000, and a payslip with nothing on it (yet)
ILLUSTRATIVE EXAMPLE · ENGLAND · PLAN 5
Started university: September 2023 · Graduated: summer 2026 · Salary: £27,000 · Balance: £40,000 (illustrative)
November payslip: £0. You normally start repaying in the April after you leave your course, so Leah's first deduction comes in April 2027.
The preview: at today's £25,000 threshold, (£2,250 − £2,083.33) × 9% = £15.00 a month, or £180 a year. Plan 5's 2027/28 threshold will be the 2026/27 figure uprated by a formula set in law (legislation.gov.uk). It hasn't been published yet, so her real first payment may be a little lower.
The interest side: Plan 5 charges RPI only, which is 4.1% for 2026/27. On £40,000 that's about £1,640 a year before she has paid anything.
Why this plan matters for women: Plan 5 runs for 40 years, not 30, so lower and interrupted earnings get repaid for longer. The Intergenerational Foundation says "the average female graduate will repay £25,000 more under Plan 5 than under Plan 2", while the average man repays about £4,000 less (Intergenerational Foundation, Aug 2026). Career breaks pause repayments because they're income-based, but on Plan 5 the clock has ten more years to run.
Leah's move this month: nothing to pay, but a lot to set up. Make sure her employer has the right plan type (Plan 5 on her starter checklist, not Plan 2). Then put £15 a month into savings now, so April's deduction feels like a habit she already has rather than a pay cut.
Seeing every deduction in one place makes it far easier to judge a payslip. The Matriarch Money Dashboard (Google Sheets and Excel) has room for gross pay, tax, pension and student loan lines next to your real monthly budget. The April 2027 change will show up the month it happens.
Claire, 46: Plan 1 plus a Postgraduate Loan, £45,000, and two deductions
ILLUSTRATIVE EXAMPLE · ENGLAND · PLAN 1 + POSTGRADUATE LOAN
Salary: £45,000 · Monthly gross: £3,750 · Plan 1 balance: £12,000 · Postgraduate Loan: £11,000 (illustrative)
November payslip: Plan 1: (£3,750 − £2,241.66) × 9% = £135.75. Postgraduate Loan: (£3,750 − £1,750) × 6% = £120.00. Total: £255.75 a month, over £3,000 a year. It's easy to miss that the two loans are collected at the same time, on different thresholds.
The interest side: Plan 1 at 4.1% adds about £492 a year against roughly £1,629 repaid. The Postgraduate Loan at 6% adds about £660 against £1,440 repaid. Unlike Sophie and Leah, Claire is paying both loans down.
April 2027: the Plan 1 threshold rises to £28,005 (DfE). On the same salary, her Plan 1 deduction falls to £127.46 a month, about £8 a month or £99 a year less. That's helpful, but it also means the loan lasts a little longer. For the Postgraduate Loan, we couldn't find a published 2027/28 threshold.
Claire's question: with a balance she will clear, extra payments can save interest, especially on the 6% loan. GOV.UK is clear that "There's no penalty" for extra repayments but "You cannot get a refund of any extra repayments you make" (GOV.UK). Overpaying only makes sense with an emergency fund already in place and no higher-interest debt, and a regulated adviser can help her weigh it against pension contributions.
The three payslips side by side
| Sophie (Plan 2) | Leah (Plan 5) | Claire (Plan 1 + PGL) | |
|---|---|---|---|
| Salary | £32,000 | £27,000 | £45,000 |
| November 2026 deduction | £19.61 | £0 | £255.75 |
| Interest added this year (approx.) | £1,940 | £1,640 | £1,152 |
| Balance direction | Growing | Growing | Falling |
| What April 2027 does | Freeze: ~£108 more a year after a 3.7% raise | First deduction, about £15/month | Plan 1 threshold up: ~£99 less a year |
Our calculations from GOV.UK 2026/27 thresholds and rates. Real payslips can differ by a few pence because of payroll rounding, and interest is charged daily. Illustrative examples, not real people.
Why the freeze lands harder on women
A frozen threshold catches lower and middle earners the most, and women are more likely to be in that range for longer. ONS provisional data for April 2026 put the full-time gender pay gap at 6.8%, widening to 8.2% for ages 40–49 and 11.0% for 50–59 (ONS). London Economics' modelling for HEPI estimates women's average lifetime Plan 2 repayments rising from £26,300 under the original terms to £43,200, an increase of £16,900, compared with £13,400 for men (HEPI, Apr 2026). Men still repay more in total, but the increase for women is larger, both in pounds and as a share (about 64% versus 24%).
Politically, the issue is still open. Martin Lewis called the freeze "morally reprehensible" after the Budget, and the Chancellor said: "I simply haven't been able to do action I might have wanted to take at this Budget" (MoneySavingExpert, 3 Nov 2026). For everything else the Budget changed, see Budget 2026: what it means for you and the £1,050 living standards fall. Our gender pay gap country comparison shows the pay side.
Your 10-minute payslip check
- Find your plan type. Log in to your Student Loans Company account. Check that your payslip uses the same plan; a wrong plan code is a common cause of overpaying.
- Do the sum. (Monthly gross − your plan's monthly threshold) × 9%. If it's more than a pound or two out, ask payroll.
- Check for a second deduction if you took a Postgraduate Loan: 6% above £1,750 a month.
- Look up your write-off date. It decides whether overpaying is worth considering at all.
- Write down your April 2027 number. Plan 2: the same £29,385 threshold on a higher salary. Plan 1: a £28,005 threshold. Put it in your budget now. Our UK money calendar has the other April dates, and National Living Wage 2027 covers the pay side.
If opening the SLC account is the part you keep putting off, start with something gentler: the free 7-Day Money Anxiety Reset journal has a five-minute daily prompt that makes the first look easier. And if Christmas is the next number on your mind, see how the UK's £1,411-per-person Christmas compares with four other countries.
Quick answers
What is the student loan repayment threshold for 2027?
Plan 2 stays at £29,385 from April 2027 (frozen until 2030). Plan 1 rises to £28,005. The 2027/28 figures for Plans 4 and 5 and the Postgraduate Loan hadn't been published at the time of writing.
How much student loan will I pay a month on £30,000?
On Plan 2: (£30,000 − £29,385) × 9% ÷ 12 ≈ £4.61 a month. On Plan 5: (£30,000 − £25,000) × 9% ÷ 12 = £37.50 a month.
Should I overpay my student loan?
It depends on whether you'd clear it before write-off. Extra payments can't be refunded, so get personalised guidance before you make large ones.
Sources
- Repaying your student loan: what you pay; make extra repayments; when your loan gets written off – GOV.UK, 2026 – gov.uk
- Special rules for student loans (employer thresholds from April 2026) – HMRC, 2026 – gov.uk
- Student loans interest rates and repayment threshold announcement – Department for Education, 10 Aug 2026 – gov.uk
- Budget 2025 (Plan 2 threshold maintained from 2027-28 to 2029-30) – HM Treasury, 2025 – gov.uk
- The Education (Student Fees, Awards and Support) Regulations 2022, reg. 65 – legislation.gov.uk – legislation.gov.uk
- Gender pay gap in the UK: 2026; Average weekly earnings in Great Britain: October 2026 – ONS, 2026 – ons.gov.uk
- How do Plan 2 student loans work and how have they changed over time? – Institute for Fiscal Studies – ifs.org.uk
- Understanding Plan 2 repayment terms – London Economics for HEPI/NUS, Apr 2026 – hepi.ac.uk
- Repayment Repression – Intergenerational Foundation, Aug 2026 – if.org.uk
- Plan 2 and Plan 3 interest cap, 7 Apr 2026; Martin Lewis on Budget student loans, 3 Nov 2026; Plan 2 repayment guide – MoneySavingExpert, 2026 – moneysavingexpert.com
Educational content only. Not personalised financial advice.