Plan 2 vs Plan 5 Student Loans
Compare the differences between pre-2023 and post-2023 student loan plans
Last updated:
Key Differences at a Glance
| Feature | Plan 2 | Plan 5 | Better Option |
|---|---|---|---|
| Who has it | Students starting between 2012-2023 | Students starting from Sept 2023 | N/A (based on when you studied) |
| Repayment Threshold | £27,295 per year | £25,000 per year | Plan 2 (higher threshold means less monthly repayment) |
| Interest Rate | RPI to RPI + 3% (varies by income) | RPI only (regardless of income) | Plan 5 (lower interest means less debt growth) |
| Write-off Period | 30 years | 40 years | Plan 2 (shorter period means debt cleared sooner) |
| Monthly Payment (on £35,000 salary) | £58 per month | £75 per month | Plan 2 (lower monthly payments) |
Source: Student Finance England (September 1 2025)
Note: Which plan is "better" depends on your individual circumstances, particularly your expected career earnings. Low to middle earners typically pay more under Plan 5, while high earners may benefit from its lower interest rates.
Why Trust This Comparison?
- Based on official UK loan plans
- Regularly updated with latest rates
- Data-driven comparison
Detailed Comparison
Repayment Thresholds
Plan 2 has a higher repayment threshold (£27,295) compared to Plan 5 (£25,000). This £2,295 difference means:
- Plan 5 borrowers start repaying at lower income levels
- At the same salary, Plan 5 borrowers repay more each month
- For someone earning £30,000, the difference is £17 more per month under Plan 5
You can calculate your exact monthly repayments using our Plan 2 calculator or Plan 5 calculator.
Interest Rates
The interest rate structure is significantly different between the two plans:
| Circumstance | Plan 2 Interest | Plan 5 Interest |
|---|---|---|
| While studying | RPI + 3% | RPI only |
| After graduation, earning under threshold | RPI only | RPI only |
| Earning between threshold and £49,130 | RPI to RPI + 3% (sliding scale) | RPI only |
| Earning over £49,130 | RPI + 3% | RPI only |
For a complete explanation of how interest works, read our student loan interest rates guide or try the interest calculator.
Write-off Period
Plan 2 loans are written off 30 years after you become eligible to repay, while Plan 5 loans are written off after 40 years.
This extended period means:
- Plan 5 borrowers may be repaying into their 60s
- More Plan 5 borrowers will fully repay before write-off
- Total lifetime repayments can be higher for some Plan 5 borrowers
Use our write-off calculator to estimate cancellation year and total paid.
Example: Low to Middle Earner (£30,000 with 2% annual growth)
- Plan 2: ~£22,000 over 30 years before write-off
- Plan 5: ~£37,000 over 40 years before write-off
- Difference: Plan 5 costs ~£15,000 more over the lifetime
Based on internal calculations using official thresholds and interest rates.
Example: High Earner (£50,000 with 3% annual growth)
- Plan 2: ~£83,000 (includes significant interest)
- Plan 5: ~£65,000 (lower interest)
- Difference: Plan 5 saves ~£18,000
Based on internal calculations using official thresholds and interest rates.
Compare Your Personal Repayments
Use our calculator to see exactly how each plan would affect you based on your expected salary
More Tools and Resources
Disclaimer:
This guide provides general information based on current student finance policies. Individual circumstances may vary. The information was accurate at the time of publication but is subject to change.
Sources & References
- 1.Student Loan Repayment
GOV.UK
- 2.
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Our content is based on the latest information from official UK government sources. The calculators use current repayment thresholds and interest rates as defined by Student Finance England and equivalent bodies.