Student Loan Interest Rate Change Impact Calculator
Understand how changes in SLC interest rates affect your loan balance and total interest paid over time. Compare different rate scenarios to see the real financial impact.
Interest Rates Change Yearly
UK student loan interest rates are set each September based on RPI inflation from the previous March, and can change mid-year if capped.
RPI to RPI+3% (income-based after graduation)
5 years in repayment | 25 years until write-off
Write-off runs from the April after the course ends, so the clock starts the year after the year entered here[source].
While studying, Plan 2 is charged at the top of the scale (RPI + 3%, currently 6.0% under the 6% cap) rather than banded by income. Ticking this sets the current rate below to that figure.
Official 2026/27 rate for Plan 2: 6.0%[source]
Change: -1.0 percentage points (-16.7% decrease)
Maximum: 25 years (until loan write-off)
Outcome: repaid in full
£7,288 less interest
Moving from 6.0% to 5.0% changes the balance after 10 years from £80,588 to £73,300.
A higher rate does not raise your monthly repayment. Repayments are a fixed percentage of income above the threshold, so the rate only changes the balance and therefore how much is left to write off.
Impact Analysis
Interest at the current rate
£35,588
6.0% over 10 years
Interest at the new rate
£28,300
5.0% over the same period
Difference
£-7,288
-20.5% change
Average per year
£-729
Extra interest a year
How this is worked out
£45,000 × (1 + 5.0%) ^ 10 − £45,000 = £28,300
Interest at the new rate: the balance compounded once a year for 10 years, less the balance you started with. No repayments are modelled, so this is the gross interest added.
Current Rate (6.0%)
Starting Balance
£45,000
Total Interest Over 10 Years
£35,588
Final Balance
£80,588
New Rate (5.0%)
Starting Balance
£45,000
Total Interest Over 10 Years
£28,300
Final Balance
£73,300
A rate decrease of 1.0 percentage points would save £7,288 in interest over 10 years. Your monthly repayment is unchanged either way: it is 9% of income above the threshold, not a function of the balance[source].
Year-by-Year Comparison (First 5 Years)
| Year | Current Rate Interest | New Rate Interest | Difference | Balance Gap |
|---|---|---|---|---|
| 1 | £2,700 | £2,250 | £-450 | £-450 |
| 2 | £2,862 | £2,363 | £-499 | £-949 |
| 3 | £3,034 | £2,481 | £-553 | £-1,503 |
| 4 | £3,216 | £2,605 | £-611 | £-2,114 |
| 5 | £3,409 | £2,735 | £-674 | £-2,787 |
Showing first 5 years of the 10-year projection
Rates, assumptions and sources
Every figure below is the 2026-27 published figure, read from this site's single source of truth at page-render time[source]. The 6% Plan 2 and Postgraduate interest cap covers the 2026/27 year only and is not assumed to continue[source].
| Plan | Threshold | Rate | Interest | Written off | Threshold freeze |
|---|---|---|---|---|---|
| Plan 2 | £29,385[source] | 9% | 4.1% to 7.1% by income, capped at 6% for 2026-27[source] | 30 years[source] | Frozen at £29,385 until April 2030 |
Write-off is counted from the April after the course ends, not from the course-end date itself, and the Plan 2 interest bands (£29,385 lower, £52,885 upper) are frozen alongside the Plan 2 repayment threshold.
This calculator also assumes
- Current rate used
- 6.0% (the official 2026/27 figure)
- Proposed rate
- 5.0% (your input)
- Compounding
- Annually, on the whole balance
- Repayments modelled
- None - this is gross interest only
- Projection horizon
- 10 years, capped at the 30-year write-off
Growth, inflation and long-run interest figures are assumptions, not published rates. Change them and the projection changes.
Historical interest rates, 2019/20 to 2026/27
The rate in force from 1 September of each year, which runs to 31 August. These figures come from src/lib/calculators/interest-history.ts, the single table the thresholds by tax year browser also renders. The two pages used to keep separate copies and disagreed on the April-to-August 2024 Plan 1 rate; the sourced figure of 6.25% is the correct one, because Plan 1 is the lower of RPI or Bank of England base rate plus 1% and the base rate was 5.25% throughout that window[source].
| Period | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgraduate |
|---|---|---|---|---|---|
| Sept 2026 to Aug 2027(current)Tax year 2026/27 | 4.1% | 4.1% to 6% (capped) | 4.1% | 4.1% | 6% (capped) |
| Sept 2025 to Aug 2026Tax year 2025/26 | 3.2% | 3.2% to 6.2% | 3.2% | 3.2% | 6.2% |
| Sept 2024 to Aug 2025Tax year 2024/25 | 4.3% | 4.3% to 7.3% | 4.3% | 4.3% | 7.3% |
| Sept 2023 to Aug 2024Tax year 2023/24 | 6.25% | 7.3% (capped, all incomes) | 6.25% | 7.3% (capped) | 7.3% (capped) |
| Sept 2022 to Aug 2023Tax year 2022/23 | 2.75% | 6.3% (capped, all incomes) | 2.75% | n/a | 6.3% (capped) |
| Sept 2021 to Aug 2022Tax year 2021/22 | 1.1% | 1.5% to 4.2% (capped) | 1.1% | n/a | 4.2% (capped) |
| Sept 2020 to Aug 2021Tax year 2020/21 | 1.1% | 2.6% to 5.6% | n/a | n/a | 5.6% |
| Sept 2019 to Aug 2020Tax year 2019/20 | 1.75% | 2.4% to 5.4% | n/a | n/a | 5.4% |
What moved each rate, and where each figure came from
- 2026/27: From 1 September 2026, with RPI at 4.1%. Plan 2 and Postgraduate Loan interest is capped at 6% for the 2026/27 academic year only; without the cap the top rate would be 7.1%.[source]
- 2025/26: From 1 September 2025 to 31 August 2026, with RPI at 3.2%. No rate moved during the period. Earlier in this tax year, from April to August 2025, the rates set on 1 September 2024 still applied: 4.3% on Plan 1, Plan 4 and Plan 5, 4.3% to 7.3% on Plan 2 and 7.3% on the Postgraduate Loan.[source]
- 2024/25: From 1 September 2024 to 31 August 2025, with RPI at 4.3%. No rate moved during the period, and the market-rate cap did not apply. Earlier in this tax year, from April to August 2024, the previous period's rates were still in force: Plan 1 and Plan 4 were 6.25% (Bank of England base rate 5.25% plus 1%) until 29 August 2024 and 6% on 30 and 31 August; the market-rate cap held Plan 2 (at every income), Plan 5 and Postgraduate Loans at 7.8% from 1 April, 7.9% from 1 June and 8% from 1 August 2024.[source]
- 2023/24: From 1 September 2023 to 31 August 2024. RPI was above the market-rate cap, so every Plan 2, Plan 5 and Postgraduate borrower paid the same capped rate whatever their income: 7.3% from 1 September 2023, 7.5% from 1 December 2023, 7.6% from 1 January 2024, 7.7% from 1 March, 7.8% from 1 April, 7.9% from 1 June and 8% from 1 August 2024. Plan 1 and Plan 4 were 6.25% until 29 August 2024, then 6% on 30 and 31 August. Earlier in this tax year, from April to August 2023, Plan 1 and Plan 4 rose with the base rate (5% until 20 April, 5.25% from 21 April, 5.5% from 9 June and 6% from 21 July 2023); the cap held Plan 2 and Postgraduate Loans at 6.9% until 31 May and 7.1% from 1 June 2023; and Plan 5 loans began on 1 August 2023 at that 7.1% cap.[source]
- 2022/23: From 1 September 2022 to 31 August 2023. Plan 1 and Plan 4 rose with the Bank of England base rate: 2.75% from 1 September, 3.25% from 20 October and 4% from 2 December 2022, 4.5% from 12 January and 5% from 3 March 2023, then 5.25% from 21 April, 5.5% from 9 June and 6% from 21 July 2023. RPI was above the market-rate cap, so every Plan 2 and Postgraduate borrower paid the same capped rate whatever their income: 6.3% from 1 September 2022, 6.5% from 1 December 2022, 6.9% from 1 March 2023 and 7.1% from 1 June 2023. Plan 5 loans began on 1 August 2023, in the last month of this period, at that 7.1% cap; there was no Plan 5 at the 1 September 2022 reset or at any point in the 2022/23 tax year. Earlier in this tax year, from April to August 2022, Plan 1 and Plan 4 were 1.5%, Plan 2 1.5% to 4.5% and the Postgraduate Loan 4.5%.[source]
- 2021/22: From 1 September 2021 to 31 August 2022, with RPI at 1.5%. Plan 1 and Plan 4 rose with the base rate to 1.25% on 13 January 2022 and 1.5% on 3 March 2022. The market-rate cap held the Plan 2 top rate and the Postgraduate Loan at 4.2% in September 2021, 4.1% from 1 October 2021 and 4.4% from 1 January 2022; from 1 March 2022 the cap no longer bit and the full RPI plus 3% (4.5%) applied. Earlier in this tax year, Plan 4 was created on 6 April 2021, charging 1.1% like Plan 1, and from 1 July to 31 August 2021 the cap cut the Plan 2 top rate and the Postgraduate Loan from 5.6% to 5.3% (the Plan 2 lower rate stayed at 2.6%).[source]
- 2020/21: From 1 September 2020 to 31 August 2021, with RPI at 2.6%. Plan 1 stayed at 1.1% throughout. From 1 July 2021 the market-rate cap cut the Plan 2 top rate and the Postgraduate Loan from 5.6% to 5.3% for the last two months of the period; the Plan 2 lower rate stayed at 2.6%. Plan 4 did not exist until 6 April 2021, the first day of the 2021/22 tax year; Scottish borrowers were on Plan 1 terms until then, and Plan 4 charged 1.1%, like Plan 1, from that date to 31 August 2021. Earlier in this tax year, Plan 1 fell from 1.75% to 1.1% on 7 April 2020, and Plan 2 was 2.4% to 5.4% and the Postgraduate Loan 5.4% until 31 August 2020.[source]
- 2019/20: From 1 September 2019 to 31 August 2020, with RPI at 2.4%. Plan 1 was 1.75% until 6 April 2020 and 1.1% from 7 April 2020 to the end of the period (SLC's Plan 4 page, which repeats the Plan 1 history, dates the cut 6 April). Plan 2 and Postgraduate rates did not move. Earlier in this tax year, from April to August 2019, Plan 1 was already 1.75%, Plan 2 was 3.3% to 6.3% and the Postgraduate Loan 6.3%.[source]
Related Calculators
Understanding Student Loan Interest Rate Changes
UK student loan interest rates change annually and can significantly impact the total amount borrowers owe over time. Understanding how these changes work and their financial impact is crucial for effective loan management.
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