UK Student Loan Types Explained
A comprehensive guide to Plan 1, Plan 2, Plan 4, Plan 5, and Postgraduate loans - understand which plan you have and how it works
Key Takeaways
- Plan 1 (pre-September 2012): threshold £26,900, interest 4.1%, written off 25 years after becoming eligible to repay or at age 65.
- Plan 2 (England September 2012 to July 2023, Wales September 2012 onwards): threshold £29,385, interest 4.1% up to a 6% cap (income-linked), written off after 30 years.
- Plan 4 (Scottish loans): threshold £33,795, the highest UK domestic threshold, interest 4.1%, written off 30 years after course completion.
- Plan 5 (from August 2023): threshold £25,000 (lowest), interest RPI-only (4.1%), but 40-year write-off period — designed to collect more from lower and middle earners over a longer period.
- Postgraduate loans: separate £21,000 threshold, 6% repayment rate, stacks on top of undergraduate loans for a combined 15% deduction on income above both thresholds.
In this article
The UK student loans system can be confusing due to the multiple loan plans that exist. Which plan you're on depends on when and where in the UK you studied. This guide explains each loan type, their key differences, and how to identify which plan applies to you.
This is the overview. Each type has its own page with the full rules, worked examples and FAQs: Plan 1 student loan, Plan 2 student loan, student loan Plan 4, Plan 5 student loans and the Postgraduate Loan (Plan 3). All five sit side by side on the student loan plans page.
The way your student loan works - including repayment thresholds, interest rates, and loan term - varies significantly depending on your plan type. Understanding your loan type is crucial for planning your finances effectively and knowing what you'll pay each month.
Each plan has different rules that were introduced at different times as the government changed how student funding works. From the oldest Plan 1 loans with their lower thresholds but favorable interest rates, to the newest Plan 5 loans with their 40-year repayment periods, each plan reflects the policy priorities at the time it was introduced. If you want the mechanics behind repayment, interest and write-off before comparing plans, our guide on how UK student loans work covers that ground first.
Which Student Loan Plan Do You Have? Quick Reference
Your loan plan depends on when you started your course and where in the UK you studied. Here's a quick way to identify which plan applies to you, or use our interactive what student loan plan am I on checker if you would rather answer a few questions than read through the list:
Plan 1
You're on Plan 1 if:
- You started an undergraduate course before 1 September 2012 in England or Wales
- You started an undergraduate course in Northern Ireland (any year)
Plan 2
You're on Plan 2 if:
- You started an undergraduate course between 1 September 2012 and 31 July 2023 in England or Wales
Plan 4
You're on Plan 4 if:
- You started an undergraduate or postgraduate course in Scotland on or after 1 September 1998
Plan 5
You're on Plan 5 if:
- You started an undergraduate course on or after 1 August 2023 in England (Wales stayed on Plan 2)
Postgraduate Loan
You have a Postgraduate Loan if:
- You took out a loan for a Master's degree (available since 2016)
- You took out a loan for a Doctoral degree (available since 2018)
Comparison of All Student Loan Plans
Here's a comprehensive comparison of all current student loan plans showing the key differences that affect your repayments:
| Feature | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgraduate |
|---|---|---|---|---|---|
| Repayment Threshold (2026-27) | £26,900 | £29,385 | £33,795 | £25,000 | £21,000 |
| Repayment Rate | 9% | 9% | 9% | 9% | 6% |
| Interest Rate | Lower of RPI or Bank Rate + 1% | RPI to RPI + 3% (income dependent) | Lower of RPI or Bank Rate + 1% | RPI only | RPI + 3% |
| Write-off Period | 25 years or age 65 | 30 years | 30 years | 40 years | 30 years |
The table shows the current figures for the 2026-27 tax year. Thresholds can change each April and interest rates each September, so check for updates at both points.
Plan 1 Loans
Plan 1 is the oldest loan plan still in repayment and applies to students who started their courses before September 2012 in England and Wales, or Northern Irish students from any year. The full rules, including how Plan 1 and Plan 2 are repaid together, are on the Plan 1 student loan page.
Key Features of Plan 1:
- Repayment threshold: £26,900 per year (2026/27), which rises annually with inflation
- Interest rate: The lower of either RPI inflation or the Bank of England base rate plus 1% (currently 4.1%)
- Write-off period: 25 years from the April after graduation for post-2006 starters, or when you turn 65 for pre-2006 starters
- Typical loan amounts: Lower than newer plans, reflecting lower historical tuition fees
Plan 1 loans generally have the lowest interest rates of all the plans, making them relatively favorable for borrowers. However, the repayment threshold is lower than Plans 2, 4, and 5, meaning you start repaying sooner.
Example: Plan 1 Monthly Repayment
If you earn £30,000 per year:
- Annual income above threshold: £30,000 - £26,900 = £3,100
- Monthly repayment: £3,100 ÷ 12 × 9% = £23.25
The shorter 25-year write-off period means Plan 1 borrowers are more likely to pay off their loans in full compared to those on newer plans with longer repayment periods.
Plan 2 Loans
Plan 2 applies to English students who started their undergraduate courses between September 2012 and July 2023, and to Welsh students from September 2012 onwards. It was introduced alongside the increase in tuition fees to £9,000 (now £9,790). The threshold history, the interest bands and the worked examples are on the Plan 2 student loan page.
Key Features of Plan 2:
- Repayment threshold: £29,385 per year (2026/27), frozen at that level from April 2027 to April 2030
- Interest rate: Variable based on income and study status
- Write-off period: 30 years from the April after you finish your course
- Typical loan amounts: Higher than Plan 1, reflecting increased tuition fees
The Plan 2 interest rate structure is more complex than other plans:
While studying:
RPI + 3%, capped at 6% since 1 September 2026
After graduation, earning under threshold:
RPI only (currently 4.1%)
After graduation, earning above threshold:
RPI to RPI + 3% (increases with income up to £52,885)
Example: Plan 2 Monthly Repayment
If you earn £35,000 per year:
- Annual income above threshold: £35,000 - £29,385 = £5,615
- Monthly repayment: £5,615 ÷ 12 × 9% = £42.11
Plan 2 introduced significantly higher tuition fees but has a higher repayment threshold than Plan 1, meaning you need to earn more before you start repaying. The longer 30-year write-off period means many borrowers will not repay their loans in full.
Plan 4 Loans
Plan 4 applies to anyone whose loan came through the Student Awards Agency Scotland (SAAS), undergraduate or postgraduate. Scottish students typically have lower loan amounts as tuition fees are paid by the Scottish government for Scottish students studying in Scotland. Full rules are on the student loan Plan 4 page.
Key Features of Plan 4:
- Repayment threshold: £33,795 per year (the highest of any plan)
- Interest rate: The lower of either RPI inflation or the Bank of England base rate plus 1% (same as Plan 1)
- Write-off period: 30 years from the April after you finish your course
- Typical loan amounts: Often lower due to government-funded tuition fees in Scotland
Plan 4 combines favorable elements from both Plan 1 (low interest rates) and Plan 2 (higher repayment threshold). This makes it one of the most borrower-friendly plans currently available.
Example: Plan 4 Monthly Repayment
If you earn £35,000 per year:
- Annual income above threshold: £35,000 - £33,795 = £1,205
- Monthly repayment: £1,205 ÷ 12 × 9% = £9.04
Scottish students studying in Scotland benefit from both lower loan amounts (due to free tuition) and favorable repayment terms, making Plan 4 particularly advantageous for Scottish graduates.
Plan 5 Loans
Plan 5 is the newest undergraduate loan type, applying to English students who started their course on or after 1 August 2023. It is England only: Welsh starters from the same date stayed on Plan 2. This plan represents significant changes to student loan policy, set out in full on the Plan 5 student loans page.
Key Features of Plan 5:
- Repayment threshold: £25,000 per year (lower than Plan 2)
- Interest rate: RPI only (both during and after study), currently 4.1%
- Write-off period: 40 years from the April after you finish your course
- Typical loan amounts: Similar to Plan 2, reflecting current tuition fees
Plan 5 introduced three major changes: a lower repayment threshold, a simplified interest rate structure (always RPI), and a significantly longer repayment period (40 years instead of 30).
Impact of Plan 5 Changes:
- Lower threshold means graduates start repaying sooner
- Longer 40-year period means more graduates will repay larger portions of their loans
- Simplified RPI-only interest rate makes calculations more predictable
- Government projections suggest more graduates will repay loans in full
Example: Plan 5 Monthly Repayment
If you earn £30,000 per year:
- Annual income above threshold: £30,000 - £25,000 = £5,000
- Monthly repayment: £5,000 ÷ 12 × 9% = £37.50
The combination of a lower threshold and longer repayment period means Plan 5 graduates will typically pay more over their lifetime compared to Plan 2 graduates, even with the lower interest rate.
Postgraduate Loans
Postgraduate loans are available for Master's degrees (since 2016) and Doctoral studies (since 2018). These loans work differently from undergraduate loans and have their own repayment terms; the Department for Education calls the plan Plan 3. Full rules are on the Postgraduate Loan (Plan 3) page.
Key Features of Postgraduate Loans:
- Repayment threshold: £21,000 per year (frozen since introduction)
- Repayment rate: 6% of income above the threshold (not 9%)
- Interest rate: RPI + 3% throughout the loan, capped at 6% since 1 September 2026
- Write-off period: 30 years from the April after you finish your course
Loan amounts vary by level of study:
Master's degrees:
Up to £13,206 total (2026/27)
Doctoral degrees:
Up to £31,122 total (2026/27)
Example: Postgraduate Loan Monthly Repayment
If you earn £30,000 per year:
- Annual income above threshold: £30,000 - £21,000 = £9,000
- Monthly repayment: £9,000 ÷ 12 × 6% = £45.00
If you have both an undergraduate and postgraduate loan, you'll repay them simultaneously. This means you could pay 9% on income above the undergraduate threshold plus 6% on income above the postgraduate threshold, potentially reaching a combined rate of 15% on higher incomes.
Having Multiple Loan Types
Many people have multiple loans from different plans. This happens when you study multiple courses or when loan rules change during your studies.
Common Multiple Loan Scenarios:
- Undergraduate loan (any plan) + Postgraduate loan
- Multiple undergraduate loans if you studied different courses
- Both Plan 1 and Plan 2 if you studied before and after 2012
- Loans from different countries within the UK
How Multiple Loans Are Repaid:
- Each loan maintains its own repayment terms and thresholds
- You make separate calculations for each loan type
- Deductions are combined on your payslip but tracked separately
- Each loan has its own write-off date
Example: Combined Repayments
If you have Plan 2 undergraduate + Postgraduate loans and earn £35,000:
- Plan 2: (£35,000 - £29,385) × 9% = £505.35 per year
- Postgraduate: (£35,000 - £21,000) × 6% = £840.00 per year
- Total annual repayment: £1,345.35 (£112.11 per month)
Our Combined Repayment Calculator can help you understand your total repayments when you have loans from different plans.
How to Check Which Loan Type You Have
If you're not sure which loan plan you're on, there are several ways to find out:
Check your payslip
Your payslip should show student loan deductions with a plan number (SL01, SL02, SL04, SL05, or SLPG for postgraduate).
Log into your Student Finance account
Your online account with Student Finance England, Wales, Scotland, or Northern Ireland will show your loan details and plan type.
Check your annual statement
Annual statements sent by the Student Loans Company clearly state which plan you're on and your current balance.
Use the quick reference above
Based on when and where you studied, you can determine your loan plan using the quick reference section of this guide.
Historical Changes and Why Multiple Plans Exist
The UK student loans system has evolved significantly since its introduction. Each plan reflects the government's policy priorities at the time it was created:
1998: Introduction of tuition fees
Tuition fees introduced at £1,000 per year. Plan 1 loans created to support this change.
2006: Fees increase to £3,000
Tuition fees raised to £3,000 per year. Plan 1 terms adjusted to accommodate higher borrowing.
2012: Plan 2 introduction
Fees increased to £9,000. Plan 2 created with higher thresholds and longer repayment terms to make higher fees manageable.
2016-2018: Postgraduate loans
Master's (2016) and Doctoral (2018) loans introduced to support postgraduate study.
2023: Plan 5 introduction
Plan 5 introduced with lower thresholds, simplified interest, and longer repayment periods to increase loan repayment rates.
Each change was made without affecting existing borrowers, creating the complex multi-plan system we have today. This approach protects existing students but creates confusion for those trying to understand the system.
Future Changes to Student Loan Plans
The student loans system continues to evolve. Recent and upcoming changes include:
Plan 2 Threshold Freeze
The Plan 2 threshold was frozen at £27,295 to April 2025. It then rose to £28,470 in April 2025 and £29,385 in April 2026, and is frozen again at £29,385 from April 2027 to April 2030.
Interest Rate Reviews
The government regularly reviews interest rate methodologies. Recent changes have generally reduced rates from their previous peaks.
Potential Future Reforms
Various reforms are regularly proposed, including consolidating plans, changing interest rates, or modifying repayment terms. Any changes would likely only affect new students.
Stay informed about changes through official channels like GOV.UK and Student Finance. Changes to existing loans are rare, but new students may face different terms as policy evolves.
Understanding Your Student Loan Plan
Understanding which student loan plan you're on is crucial for financial planning. Each plan has different rules that significantly affect how much you'll repay and when your loan will be written off.
The key differences to remember are repayment thresholds (when you start paying), interest rates (how much your debt grows), and write-off periods (when remaining debt is cancelled). These three factors combine to determine your total lifetime repayment.
Use our student loan calculator to model how different scenarios affect your specific loan plan. Understanding your loan terms helps you make informed decisions about careers, salary negotiations, and financial planning.
Remember that loan terms can change for new students, but existing borrowers are typically protected from retrospective changes. Keep track of any policy announcements that might affect future students or any loans you might take out for further study.
Know your loan plan to understand your repayments
Use our calculators to see exactly how your specific loan plan affects your monthly payments
Try Our CalculatorsStudent Loan Calculator UK Editorial Team
Editorial Team
This page is maintained by the Student Loan Calculator UK editorial team, checked against GOV.UK and Student Loans Company guidance. Read more about our editorial approach.