Postgraduate Student Loan Debt: How Much It Is and What You Repay
Postgraduate student loan debt starts at whatever you borrow, up to £13,206 for a Master's Loan or £31,122 for a Doctoral Loan in 2026/27, and is repaid at 6% of income above £21,000 for up to 30 years. That 6% comes out of your pay in addition to any undergraduate deduction, not instead of it. This guide covers how big the balance gets, what the combined deduction costs each month, when each loan is written off, and whether borrowing is worth it in the first place.
For the threshold, rate, interest and write-off rules in one place, see postgraduate loan repayments. For your own monthly figure, use the postgraduate loan calculator.
Key Takeaways
- Postgraduate Master’s loans provide up to £13,206 (2026/27) and Doctoral loans up to £31,122, repaid at 6% of income above the separate £21,000 threshold.
- If you hold both undergraduate and postgraduate loans, you repay a combined 15% of income above both thresholds: 9% towards your undergraduate loan and 6% towards your postgraduate loan, deducted at the same time as two separate lines on your payslip.
- While the 6% interest cap holds, a postgraduate balance only starts falling once you earn more than £21,000 plus the balance itself, because interest and repayments are charged at the same 6%. On a full £13,206 Master’s Loan that is about £34,206; below it the debt grows while you pay.
- Postgraduate loan interest is fixed at RPI + 3%, capped at 6% since 1 September 2026, regardless of your income. Unlike Plan 2 undergraduate loans, there is no lower rate for lower earners.
- At a £35,000 salary with Plan 2 and a postgraduate loan, combined repayments in 2026-27 come to £1,345.35 a year (£505.35 undergraduate plus £840.00 postgraduate), reducing your take-home pay by about £112.11 a month on top of tax and NI.
- Postgraduate loans are written off 30 years after the April you become due to repay, independently of your undergraduate loan’s write-off timeline.
In this article
Postgraduate loans operate under completely different rules than undergraduate student loans, yet many people with both loans don't fully understand how they interact. If you've taken out a postgraduate Master's loan or a Doctoral loan, you're not on Plan 1, 2, 4, or 5. You're on a separate postgraduate loan system, which the Department for Education calls Plan 3, with its own threshold (£21,000), its own repayment rate (6%), and its own 30-year write-off period.
The complexity intensifies if you have both undergraduate and postgraduate loans. The two systems run in parallel, each with their own threshold and repayment rate, and the postgraduate deduction is taken in addition to the undergraduate one rather than replacing it. Above both thresholds that is a combined 15% of the excess (9% undergraduate plus 6% postgraduate). Add income tax and National Insurance and the marginal rate reaches 43% for a basic-rate taxpayer and 57% for a higher-rate one, which changes how you should think about salary negotiations, career decisions and financial planning.
What catches most postgraduate borrowers off-guard is the lower threshold. Undergraduate Plan 2 starts at £29,385 and Plan 5 at £25,000, but postgraduate repayments begin at just £21,000. For many Master's graduates that means deductions start with the first professional job. A graduate entering teaching, social work or junior management on £24,000 pays nothing on a Plan 2 or Plan 5 undergraduate loan but pays £180.00 a year, £15.00 a month, on the postgraduate loan.
Understanding postgraduate loan mechanics, how they combine with undergraduate loans, and how to optimise repayments across both requires careful attention to the specific rules that govern each loan type.
Postgraduate Loan Basics
Postgraduate loans were introduced in 2016 for Master's degrees and 2018 for Doctoral degrees. They're available to help with the costs of postgraduate study, but unlike undergraduate loans, they're lump sum payments directly to you (not split between tuition and maintenance), and you decide how to use the money.
Master's Loans:
- Available up to £13,206 (2026/27) for Master's degree courses
- Paid in three instalments across the academic year
- Paid directly to you, not your university. There is no separate maintenance loan for a master's
- Can be used for tuition fees, living costs, or both
- Available for courses up to age 60
Doctoral Loans:
- Available up to £31,122 (2026/27) for PhD or other doctoral degrees
- Paid in three instalments each year, divided equally across the years of the course
- Paid directly to you
- Available for courses up to age 60
Eligibility:
- Must be a UK resident (or meet residency criteria)
- Must not already hold a qualification at the level you're applying for or higher
- Must be under 60 at the start of your course
- Course must be eligible (most taught Master's and research doctoral degrees qualify)
Unlike undergraduate loans where most people borrow similar amounts (maximum fees plus maintenance), postgraduate loan amounts vary enormously. Someone might borrow £5,000 to cover part of their fees while working, while another borrows the full £13,206 and uses it for both fees and living costs.
Whatever you borrow, repayments work the same way: 6% of income above £21,000 a year. Use the postgraduate loan calculator to see your own monthly and lifetime repayment figure for your salary and loan amount, or the postgraduate loan amount calculator to work out how much you can borrow in the first place.
How Big Postgraduate Student Loan Debt Gets
Postgraduate student loan debt has a hard ceiling on the way in and an unusual rule on the way out. The ceiling is what Student Finance England will lend: £13,206 for a Master's Loan and £31,122 for a Doctoral Loan for courses starting in 2026/27, whatever the course actually costs and whatever your household income. Nobody leaves a Master's with a six-figure postgraduate balance the way they can with an undergraduate one, because there is no separate tuition loan and no separate maintenance loan behind it. There is one sum.
What happens after that is decided by a race between interest and repayments. Interest during repayment is RPI + 3% (7.1% at the current RPI of 4.1%), held at 6% by the cap in force since 1 September 2026, and it is charged on the whole outstanding balance. Repayments are 6% of income above £21,000. Set the two equal and the salary at which a balance stops growing falls straight out of the arithmetic.
The salary at which the debt stops growing
While the cap holds interest at 6%, the same figure as the repayment rate, the two cancel and the rule is simple: your balance only starts to fall once you earn more than £21,000 plus the balance itself.
- Full Master's Loan of £13,206: interest of £792.36 a year, so the balance holds steady at a salary of about £34,206 and only shrinks above it.
- Full Doctoral Loan of £31,122: interest of £1,867.32 a year, so the balance holds steady at about £52,122.
- If the 6% cap lapses and the rate returns to RPI + 3% (7.1%), interest outruns the 6% repayment rate and the break-even salary on a full Master's Loan rises to about £36,627.
Below those salaries you are paying every month and still owing more each year. That is not a payroll error; it is how an income-contingent loan behaves when interest is charged on the balance and repayments are charged on your income.
Two things follow. First, the headline balance on your Student Loans Company statement is a poor guide to what the loan will cost you: what you actually pay is 6% of everything you earn above £21,000 for up to 30 years, and the balance simply decides whether you stop early. Second, a growing balance is not a reason to panic or to overpay, because anything still outstanding at the 30-year mark is cancelled.
The loan write-off checker projects your own balance forward against your salary, and the undergraduate vs postgraduate comparison sets the two loan types side by side if you want the differences at a glance.
How Much Comes Out of Your Pay
Key terms (apply to both Master's and Doctoral loans):
- Threshold: £21,000 annually (£1,750 monthly)
- Repayment rate: 6% on income above the threshold
- Write-off: 30 years after the April you were first due to repay
- Interest: RPI + 3% (7.1%) from the day your first instalment is paid until the loan is repaid or cancelled, capped at 6% since 1 September 2026. There is no lower rate while you study
Examples of monthly repayments (postgraduate loan only):
Income £25,000:
- Above threshold by £4,000
- Annual: £240.00
- Monthly: £20.00
Income £30,000:
- Above threshold by £9,000
- Annual: £540.00
- Monthly: £45.00
Income £40,000:
- Above threshold by £19,000
- Annual: £1,140.00
- Monthly: £95.00
Income £60,000:
- Above threshold by £39,000
- Annual: £2,340.00
- Monthly: £195.00
The 6% rate is lower than the 9% rate on undergraduate loans, but the much lower threshold (£21,000 against £25,000 to £33,795) means postgraduate repayments start earlier and bite on more of your income. A postgraduate loan is the first student loan deduction most Master's graduates ever see on a payslip.
Repaying a Postgraduate Loan Alongside Plan 2 or Plan 5
This is the part borrowers most often get wrong, so it is worth stating plainly. A postgraduate loan does not replace your undergraduate repayment, and the two are not merged into one deduction at a blended rate. Each loan is assessed on its own: 9% of income above your undergraduate plan's threshold, plus 6% of income above £21,000, both taken from the same pay packet. GOV.UK puts it as repaying “6% of your income over the Postgraduate Loan threshold (£21,000 a year) and 9% of your income over the lowest threshold for any other plan types you have”.
Because the postgraduate threshold (£21,000) is lower than every undergraduate threshold, there is a band of income where only the postgraduate deduction is running. On Plan 2 that band is £21,000 to £29,385; on Plan 5 it is £21,000 to £25,000. Above the higher threshold both run together and the marginal rate on the extra income is 15%.
What the combined deduction costs each month, 2026-27
| Salary | Postgraduate | Plan 2 | Plan 2 + PGL | Plan 5 | Plan 5 + PGL |
|---|---|---|---|---|---|
| £24,000 | £15.00 | £0.00 | £15.00 | £0.00 | £15.00 |
| £27,000 | £30.00 | £0.00 | £30.00 | £15.00 | £45.00 |
| £30,000 | £45.00 | £4.61 | £49.61 | £37.50 | £82.50 |
| £35,000 | £70.00 | £42.11 | £112.11 | £75.00 | £145.00 |
| £40,000 | £95.00 | £79.61 | £174.61 | £112.50 | £207.50 |
| £50,000 | £145.00 | £154.61 | £299.61 | £187.50 | £332.50 |
| £60,000 | £195.00 | £229.61 | £424.61 | £262.50 | £457.50 |
Monthly deductions on gross salary, 2026-27 thresholds: £29,385 for Plan 2, £25,000 for Plan 5 and £21,000 for the postgraduate loan. Plan 5 costs more than Plan 2 at the same salary because its threshold is lower, not because its rate is higher; both are 9%.
How it appears on the payslip
PAYE does not work out student loans from your annual salary. It assesses each pay period on its own against HMRC's published monthly threshold, then rounds the deduction down to a whole pound. So on £36,000 a year, paid monthly, the payslip is built like this:
| Payslip line | Monthly threshold | Rate | Deducted |
|---|---|---|---|
| Student loan (Plan 2) | £2,448 | 9% | £49 |
| Student loan (Plan 5, instead of Plan 2) | £2,083 | 9% | £82 |
| Postgraduate loan (PGL) | £1,750 | 6% | £75 |
Gross monthly pay of £3,000.00. A Plan 2 borrower sees £49 plus £75 = £124 a month across two separate lines; a Plan 5 borrower sees £82 plus £75 = £157.
Two details explain most of the gap between what people expect and what they see. The monthly thresholds are floored whole pounds rather than the annual figure divided by twelve (£29,385 ÷ 12 is £2,448.75, but HMRC publishes £2,448), and the deduction itself is rounded down, so the Plan 2 line above reads £49 where the annual calculation would give £49.61 a month. And because each pay period stands on its own, a bonus month can trigger a deduction even when your annual pay is below the threshold, with no automatic refund at the end of the year.
The 15% marginal rate:
Once you are above both thresholds, you face a 15% marginal rate on additional income (9% undergraduate + 6% postgraduate). Combined with:
Basic rate taxpayer with both loans:
20% income tax + 8% NI + 9% undergraduate + 6% postgraduate = 43% marginal rate
Higher rate taxpayer with both loans:
40% income tax + 2% NI + 9% undergraduate + 6% postgraduate = 57% marginal rate
Nearly 60 pence of every additional pound earned goes to deductions if you are a higher rate taxpayer with both loans. This affects salary negotiation, bonus valuation and career decisions.
Our combined repayment calculator shows exactly what you will pay with both loans at your own salary, and the undergraduate vs postgraduate comparison sets out how the two loan types differ in everything other than repayment.
Interest Rate on Postgraduate Loans
A postgraduate loan has a single interest rate that never changes with your income, and it runs from the day your first instalment is paid rather than from graduation. GOV.UK states it plainly: you are charged interest “from the day we make your first payment to you or to your university or college until your loan has been repaid in full or cancelled”, normally at RPI + 3%.
While studying and before repayment starts:
- Interest rate: RPI + 3% (7.1% at the current RPI of 4.1%), capped at 6% since 1 September 2026
- Charged from the day your first instalment is paid, so the balance grows before you owe a penny in repayments
- This is the same rate Plan 2 undergraduate borrowers pay while studying, not a lower one
During repayment (from April after graduation):
- Interest rate: the same RPI + 3% (7.1%), capped at 6% since 1 September 2026
- This is the maximum rate, applied regardless of income
- Unlike undergraduate Plan 2, there is no lower rate for low earners
- Everyone pays the same rate throughout repayment
The postgraduate rate is flat where Plan 2's slides with income, so a postgraduate borrower on £24,000 pays the same 6% as one on £60,000. That, combined with a threshold of only £21,000, is why postgraduate balances often grow for years despite monthly deductions. The salary at which that stops is set out in how big postgraduate student loan debt gets above: about £34,206 on a full Master's Loan while the cap holds.
One thing to watch: the 6% cap was announced for the 2026/27 academic year, covering the rate period 1 September 2026 to 31 August 2027, and has not been extended beyond it. If it lapses the rate returns to RPI + 3%, currently 7.1%, which is above the 6% repayment rate at every income.
Strategic Decisions: Should You Take a Postgraduate Loan?
The availability of postgraduate loans has made Master's degrees more accessible, but the debt implications are significant. The decision to borrow requires careful analysis.
When postgraduate loans make sense:
Career requirement:
If your target career requires a Master's degree (e.g., clinical psychology, certain engineering specializations, teaching in some subjects), the loan enables the necessary qualification.
Significant salary increase:
If the Master's degree leads to roles paying £15,000-£25,000 more than you'd earn without it, the increased earnings justify the loan cost.
No alternative funding:
If you don't have savings, family support, or employer funding for the Master's, the loan might be your only route to the qualification.
When postgraduate loans might not make sense:
Unclear career benefit:
If the Master's is "interesting" but does not clearly improve career prospects or earnings, you are borrowing up to £13,206 for an uncertain return.
Already high undergraduate debt:
If you have £50,000+ undergraduate debt that will likely be written off, adding a postgraduate loan starts a separate 30-year repayment clock of its own. You are extending your repayment obligations and increasing monthly deductions.
Low earning potential field:
If your field typically pays £25,000 to £35,000, you will make minimal progress against the postgraduate loan while paying on it for 30 years. Consider whether the qualification justifies the long-term cost.
Alternative funding available:
Scholarships, employer sponsorship, part-time study while working, or using savings might be better options if available.
Run projections using our student loan calculator to estimate whether the likely salary increase from the Master's justifies the loan cost and extended repayment obligations.
Overpayment Strategy for Postgraduate Loans
Should you voluntarily overpay your postgraduate loan? The analysis differs from undergraduate loans due to different write-off likelihood.
Postgraduate loans are more likely to be repaid in full:
Postgraduate loans have:
- Much smaller balances, capped at £13,206 for a Master's Loan against a typical undergraduate balance several times that
- Borrowers with generally higher earning potential, having already completed an undergraduate degree
- A 30-year write-off, the same as undergraduate Plan 2 and shorter than Plan 5's 40 years
Someone who borrows a full Master's Loan and goes on to earn comfortably above the £34,206 break-even salary is likely to clear it well inside the 30 years. Write-off is less decisive than for undergraduate loans, where balances are larger and earnings projections more varied.
When overpaying postgraduate loans might make sense:
High earners on track to repay in full:
If you are earning £50,000+ and will clearly repay the postgraduate loan in full, overpaying saves the 6% interest (7.1% if the cap lapses). But compare that against pension contributions (with 20% to 45% tax relief), ISA investments (potentially higher returns) or mortgage overpayments.
Small balances near the end:
If you have £2,000 remaining and can clear it easily, doing so eliminates the administrative hassle of tracking one more loan. But financially, letting it run through PAYE until naturally paid off is equivalent.
When overpaying doesn't make sense:
Low-to-moderate earners:
If you earn below the break-even salary for your balance, around £34,206 on a full Master's Loan, the balance stays flat or grows because interest matches or exceeds your repayments. Overpaying is risky here, because you might never repay in full even with overpayments and would be paying off a debt that is heading for write-off.
Combined with large undergraduate debt:
If you have £50,000 undergraduate debt plus £10,000 postgraduate debt, focus on building wealth through pensions and savings rather than targeting either loan.
General recommendation: Even for postgraduate loans where full repayment is likely, pension contributions almost always provide better financial outcomes than overpayment due to tax relief and compound growth benefits.
Salary Sacrifice and Dual Loans
Salary sacrifice creates particularly valuable benefits for borrowers with both undergraduate and postgraduate loans because it reduces both repayments simultaneously:
Example: earning £40,000 on Plan 2, sacrificing £3,000 a year into a pension
Without salary sacrifice:
- Gross salary: £40,000
- Undergraduate repayment: (£40,000 − £29,385) × 9% = £955.35
- Postgraduate repayment: (£40,000 − £21,000) × 6% = £1,140.00
- Total student loans: £2,095.35
With £3,000 salary sacrifice:
- Gross salary for student loan purposes: £37,000
- Undergraduate repayment: (£37,000 − £29,385) × 9% = £685.35
- Postgraduate repayment: (£37,000 − £21,000) × 6% = £960.00
- Total student loans: £1,645.35
- Student loan saving: £450.00 annually
The £3,000 sacrifice saves £450.00 in student loans (15% of the sacrificed amount) plus tax and National Insurance savings. You are getting substantial benefit while building pension wealth.
For dual loan borrowers, salary sacrifice is even more valuable than for single loan borrowers because you are saving at the combined 15% rate. The saving is only 15% of the sacrifice while the sacrifice keeps you above both thresholds; drop below the undergraduate threshold and the last slice saves 6% only.
Check our Pension Salary Sacrifice Effect Calculator to see exact savings for your situation.
Tax Codes and Payslips with Both Loans
Your tax code includes markers for student loans:
Tax code markers:
- SL marker: Undergraduate loan (Plan 1, 2, 4 or 5)
- PGL marker: Postgraduate loan
If you have both loans, your tax code should show both markers, something like: 1257L SL PGL
Check your payslip carefully:
Your payslip should show separate lines for:
- Student loan deduction (undergraduate)
- Postgraduate loan deduction
If your payslip only shows one deduction or doesn't differentiate between the two, contact your payroll department immediately. You might be underpaying one loan (creating arrears you'll owe later) or overpaying (if they're deducting at the wrong rate).
Common payroll errors with dual loans:
Error 1: Missing PGL marker
- Tax code shows SL but not PGL
- Only undergraduate loan gets deducted
- Postgraduate loan accumulates as unpaid
- Fix: Contact HMRC to update tax code
Error 2: Wrong repayment rates
- Sometimes payroll systems deduct 9% on both loans instead of 9% and 6%
- Or deduct 15% above a single threshold instead of calculating each loan separately against its own
- Fix: Contact payroll with evidence of correct rates from Student Loans Company
Error 3: Wrong thresholds applied
- Might use same threshold for both loans instead of different ones
- Fix: Contact payroll and HMRC to correct
Always verify your deductions match the correct calculations. Errors with dual loans are more common than with single loans because payroll systems must handle two separate calculations.
When Each Loan Is Written Off
Holding two loans means running two write-off clocks, and they do not start on the same day. Each clock starts on the April you first became due to repay that loan, which is the April after you finished or left that course. Clearing one loan, or reaching its write-off date, has no effect on the other.
| Loan | Written off | Clock starts |
|---|---|---|
| Postgraduate Loan | 30 years | The April after you finish or leave the Master's or doctorate |
| Plan 2 undergraduate | 30 years | The April after you finish or leave the undergraduate course |
| Plan 5 undergraduate | 40 years | The April after you finish or leave the undergraduate course |
What that looks like in practice
- Plan 2 plus a postgraduate loan, straight through. Finish the degree in 2026 and the Master's in 2027 and the two clocks start in April 2027 and April 2028. Both run for 30 years, so the undergraduate loan clears in 2057 and the postgraduate loan a year later, in 2058. You keep paying the 6% postgraduate deduction for that final year with no undergraduate deduction beside it.
- Plan 5 plus a postgraduate loan. The postgraduate loan goes first here, not last. On the same dates the postgraduate loan ends in 2058 after 30 years, while the Plan 5 loan runs 40 years to 2067. Plan 5 borrowers should expect the postgraduate loan to be the shorter of the two commitments.
- A gap between the courses pushes the postgraduate clock back. Work for five years before the Master's and the postgraduate loan starts five years later and ends five years later than it otherwise would.
Anything still outstanding on the write-off date is cancelled, including interest, and it is not a taxable event. The date is also why the balance on your statement matters less than the monthly deduction: for most borrowers the loan ends on a date, not on a zero balance.
Write-Off Likelihood for Postgraduate Loans
Postgraduate loans have higher write-off likelihood than undergraduate Plan 1 but lower than undergraduate Plan 2:
Likely to repay in full:
- Anyone earning well above the break-even salary of about £34,206 on a full Master's Loan
- Those without undergraduate loans who only have postgraduate debt
- Very high earners (£80,000 or more), whose 6% deduction runs well ahead of the interest and clears even a full Doctoral Loan long before the 30 years are up
Likely to have write-off:
- Anyone earning below the break-even salary for their balance, where interest keeps pace with repayments
- Those with both large undergraduate and postgraduate balances
- Anyone whose balance is still growing after 10-15 years of repayment
The key variable is whether you're making meaningful progress against the balance. If your balance is decreasing by £500+ annually, you'll probably repay in full eventually. If it's flat or growing, write-off is likely.
Our Loan Write-Off Checker helps you assess write-off likelihood for both loans individually and combined.
Taking Control of Postgraduate Loan Strategy
Postgraduate loans require strategic thinking, particularly when combined with undergraduate debt:
Key strategic principles:
- Understand the 15% combined rate: If you have both loans, accept that 15% of income above the higher threshold goes to student loans. This is your reality for up to 30 years.
- Do not overpay either loan: Focus money on pensions and savings. Tax relief and compound growth beat paying down loans that might be written off.
- Use salary sacrifice aggressively: For dual loan borrowers, salary sacrifice saves at the combined 15% rate plus tax and NI savings. It is exceptionally valuable.
- Check payslips monthly: Errors are more common with dual loans. Verify both loans are deducted correctly at the correct rates and monthly thresholds.
- Career decisions: The 15% rate makes raises less valuable (you keep 57% of a rise at basic rate, 43% at higher rate). Career progression is still financially beneficial. Do not turn down opportunities because of student loan impact.
- Plan for 30 years: Your postgraduate loan runs for 30 years, the same as undergraduate Plan 2, and its clock starts later. That is potentially into your mid-fifties. Budget accordingly.
- Consider postgraduate borrowing carefully: Before taking a postgraduate loan, model the career benefit against the 30-year cost. Make sure the qualification delivers an earnings increase big enough to justify the debt.
Postgraduate loans add complexity to an already complex student loan system. But with understanding of how they work, how they combine with undergraduate loans, and how to optimise around the rules, you can manage them effectively while building wealth through other financial priorities. The dual loan burden is real, but it's manageable with the right strategy and shouldn't prevent you from achieving broader financial goals.
Frequently Asked Questions
How much postgraduate student loan debt will I have?
The most you can borrow for a course starting in 2026/27 is £13,206 for a Master's Loan and £31,122 for a Doctoral Loan, so that is the ceiling on the debt itself. What decides how big it gets afterwards is whether your repayments outrun the interest. Interest during repayment is RPI + 3% (7.1%), held at 6% by the cap in force since 1 September 2026, and repayments are 6% of income above £21,000. While the cap holds interest at the same 6% as the repayment rate, a balance only starts to fall once you earn more than £21,000 plus the balance: about £34,206 on a full Master's Loan. Below that the debt grows even though you are paying every month.
How do postgraduate loans differ from undergraduate student loans?
Postgraduate loans run on their own terms: a £21,000 threshold (against £25,000 to £33,795 across the undergraduate plans in 2026-27), a 6% repayment rate (against 9%), RPI + 3% interest during repayment (7.1% uncapped, held at a 6% cap since 1 September 2026) and a 30-year write-off. They are paid directly to you as a single sum, not split between tuition and maintenance. For courses starting on or after 1 August 2026, Master's Loans go up to £13,206 and Doctoral Loans up to £31,122. If you hold both an undergraduate and a postgraduate loan the postgraduate deduction is taken on top of the undergraduate one, so combined deductions reach 15% above the higher threshold.
What happens if I have both undergraduate and postgraduate loans?
Both loans run in parallel with separate calculations, and the postgraduate deduction is taken in addition to the undergraduate one rather than instead of it. At £40,000 in 2026-27 with Plan 2 plus a postgraduate loan you pay £955.35 on the undergraduate loan (9% of the £10,615 above £29,385) plus £1,140.00 on the postgraduate loan (6% of the £19,000 above £21,000), £2,095.35 a year in total, or £174.61 a month. That is a 15% combined marginal rate before income tax and National Insurance. For a higher-rate taxpayer it means a 57% marginal rate: 40% income tax, 2% NI, 9% and 6% student loans.
When is a postgraduate loan written off if I also have an undergraduate loan?
Each loan runs on its own clock. A postgraduate loan is written off 30 years after the April you were first due to repay it, a Plan 2 loan 30 years after the April you were first due to repay that loan, and a Plan 5 loan 40 years after its own start April. Because the postgraduate clock starts from the April after you finish the Master's or doctorate, it starts later than the undergraduate one, usually by the length of the gap between the two courses. Go straight from a three-year degree into a one-year Master's and the postgraduate loan outlives a Plan 2 loan by about a year; take five years out in between and it outlives it by about five. Paying one loan off, or reaching its write-off date, does nothing to the other.
Should I overpay my postgraduate loan?
Generally no, even though postgraduate loans are more likely to be repaid in full than undergraduate loans. Pension contributions almost always give a better return because of tax relief (20% to 45%) and compound growth. Even high earners certain to repay in full should prioritise pensions, ISAs and mortgage overpayments first. Only consider overpaying if you earn £50,000 or more, will clearly repay in full, and have already used your other tax-efficient options.
How does salary sacrifice work with dual loans?
Salary sacrifice is unusually valuable for dual-loan borrowers because it cuts both repayments at once. Sacrificing £3,000 of a £40,000 salary into a pension saves £450 a year in student loan deductions (15% of the sacrificed amount) plus income tax and National Insurance. The £3,000 goes into your pension with tax relief while your student loan deductions fall at the combined 15% rate, which makes salary sacrifice more beneficial than it is for single-loan borrowers.
What should I check on my payslip if I have both loans?
Check that your tax code shows both the SL (undergraduate) and PGL (postgraduate) markers, for example 1257L SL PGL. Your payslip should show separate deductions for each loan at the correct rates (9% and 6%) and 2026-27 monthly thresholds (£2,448 for Plan 2, £2,083 for Plan 5 and £1,750 for the postgraduate loan). Common errors are a missing PGL marker, 9% applied to both loans instead of 9% plus 6%, or the same threshold used for both. Contact payroll and HMRC straight away if the deductions are wrong; errors are more common with dual loans.
Focus on building wealth through pensions and savings while your postgraduate loan is collected through PAYE. The complexity is manageable once you understand the rules.
Student 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.