Plan 2 vs Plan 5: Which Student Loan Costs More?
Compare the differences between pre-2023 and post-2023 student loan plans
This page sets the Plan 2 student loan against Plan 5 student loans on threshold, interest, write-off and lifetime cost. Each plan page holds the full rules, and both sit alongside three other student loan plans. Your course start date decides which one you repay under, explained in how to find out which student loan plan you are on.
Key Takeaways
- Plan 5 threshold is £25,000/year, £4,385 lower than Plan 2's £29,385 in 2026-27, and the gap widens each year that Plan 5 stays frozen
- At a £30,000 salary, you repay £37.50/month on Plan 5 versus £4.61/month on Plan 2 — Plan 5 costs £32.89 more per month despite charging lower interest
- Plan 5 charges RPI only (currently 4.1%) with no income-based sliding scale; Plan 2 charges up to RPI + 3% (7.1% uncapped), capped at 6%, for earners of £52,885 or more
- Plan 5 loans write off after 40 years — 10 years longer than Plan 2's 30-year write-off, meaning you could be repaying into your early 60s
- From April 2027, the Plan 5 threshold is intended to rise with RPI inflation annually, while Plan 2's threshold freezes at £29,385 for 3 years
Key Differences at a Glance
| Feature | Plan 2 | Plan 5 | Better Option |
|---|---|---|---|
| Who has it | English starters Sept 2012 to July 2023; Welsh starters from Sept 2012 | English starters from 1 August 2023 (England only) | N/A (based on when you studied) |
| Repayment Threshold | £29,385 per year | £25,000 per year | Plan 2 (higher threshold means less monthly repayment) |
| Interest Rate | RPI to RPI + 3%, capped at 6% (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) | £42.11 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. This page is a side-by-side comparison; for the full rules on each plan see the plan 2 student loan page and the plan 5 student loan page.
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 (£29,385) compared to Plan 5 (£25,000). This £4,385 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 £32.89 more per month under Plan 5
Calculate your student loan repayment for either plan using our homepage calculator, or dive deeper with the monthly repayment calculator, which covers Plan 2 and Plan 5 together.
Interest Rates
The interest rate structure is significantly different between the two plans:
| Circumstance | Plan 2 Interest | Plan 5 Interest |
|---|---|---|
| While studying | RPI + 3% (capped at 6%) | RPI only |
| After graduation, earning under threshold | RPI only | RPI only |
| Earning between the threshold and £52,885 | RPI to RPI + 3% (sliding scale) | RPI only |
| Earning £52,885 or more | RPI + 3%, capped at 6% | 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.
- 3.
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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.