UK Student Loan Changes for 2026: Everything You Need to Know
New thresholds, tuition fees, and the Lifelong Learning Entitlement explained
Key Takeaways
- From April 2026, Plan 1 threshold rises to £26,900, Plan 2 to £29,385, and Plan 4 to £33,795 — but Plan 5 stays frozen at £25,000 with no increase, meaning you start repaying at a lower real-terms income each year.
- Tuition fees rise to £9,790 for the 2026–27 academic year — the second consecutive increase, after the cap rose from £9,250 to £9,535 in 2025/26 — adding £765 to your total three-year borrowing compared to the previous £9,535 cap.
- From 1 September 2026, Plan 2 and Postgraduate interest rates are capped at 6.0%, instead of the uncapped RPI + 3% (7.1%, using the March 2026 RPI of 4.1%) formula — the cap does not apply to Plan 1, Plan 4, or Plan 5.
- The Plan 2 threshold will freeze at £29,385 from April 2027 until April 2030 — costing the average £35,000 earner an extra £80–£250 annually in repayments through fiscal drag as wages rise but the threshold does not.
- The Lifelong Learning Entitlement launches in January 2027 (applications open September 2026), giving you a £39,160 funding pot to use across modular courses throughout your career — replacing the current one-shot undergraduate loan model.
- Care leavers now automatically receive the maximum maintenance loan entitlement without means-testing — removing administrative barriers that previously caused up to 30% of eligible care leavers to miss out on full support.
In this article
Quick Summary
- April 2026: Repayment thresholds increase by 3.2% for Plans 1, 2, and 4
- Important: Plan 2 threshold will freeze at £29,385 until April 2030
- 2026-27 Academic Year: Tuition fees rise to £9,790 (the second consecutive increase, after £9,535 in 2025/26)
- 1 September 2026: Plan 2 and Postgraduate interest rates are capped at 6.0%
- January 2027: Lifelong Learning Entitlement launches (applications open Sept 2026)
- Care Leavers: Now automatically receive maximum maintenance entitlement
The UK government has announced several major changes to student loans for 2026. These changes affect both current borrowers and future students. This guide explains everything you need to know about the new thresholds, fees, and the introduction of the Lifelong Learning Entitlement.
Repayment Threshold Increases (April 2026)
From April 2026, repayment thresholds for most loan plans are increasing by 3.2%. This means you'll start repaying your loan at a slightly higher income level[source].
New Thresholds from April 2026
| Loan Plan | 2025/26 | April 2026 | Change |
|---|---|---|---|
| Plan 1 | £26,065 | £26,900 | +£835 |
| Plan 2 | £28,470 | £29,385 | +£915 |
| Plan 4 | £32,745 | £33,795 | +£1,050 |
| Plan 5 | £25,000 | £25,000 | No change |
| Postgraduate | £21,000 | £21,000 | No change |
Source: HMRC Employer Bulletin December 2025
What This Means
If you earn £30,000 on Plan 2, your annual repayment will decrease from £138 to £55 thanks to the higher threshold. That's £83 less per year, or about £7 less per month.
Example: On £35,000 salary with Plan 2, you'll pay £505 per year instead of £585 - saving £80 annually.
Plan 2 Threshold Freeze Until April 2030
Important Notice
The Plan 2 threshold will be frozen at £29,385 from April 2026 until April 2030. This means it won't increase with inflation for 4 years.
This freeze affects students who started university between September 2012 and August 2023 in England and Wales. During the freeze period, your repayments will gradually increase in real terms as wages typically rise faster than the threshold.
Who This Affects
- English students who started between September 2012 - August 2023
- Welsh students who started from September 2012 onwards
- Anyone currently on Plan 2 for undergraduate loans
Impact Over Time
If wages grow by 3% per year during the freeze, someone earning £30,000 in 2026 would earn around £33,800 by 2030. Their student loan repayments would increase from £55/year to £396/year even though the threshold stays frozen.
Why Is This Happening?
The government says this freeze will help reduce the cost of student loans to taxpayers. Most Plan 2 borrowers don't repay their loans in full, so the freeze increases total repayments without changing interest rates.
Tuition Fee Increase to £9,790 (2026-27)
Tuition fees in England are rising for the second year running. The cap was frozen at £9,250 from 2017/18 to 2024/25, then rose to £9,535 for 2025/26. From the 2026-27 academic year, universities can charge up to £9,790 per year for undergraduate degrees - a 2.67% increase from £9,535.
Fee Comparison
Impact on Total Debt
3-year degree: Total tuition fees increase from £28,605 to £29,370 (+£765) compared with the 2025/26 cap
4-year degree: Total tuition fees increase from £38,140 to £39,160 (+£1,020) compared with the 2025/26 cap
Does This Affect Me?
- Starting September 2026 or later: Yes, you'll pay £9,790 per year
- Already at university: No, your fees stay at the cap in force when you started (£9,535 for 2025/26 starters, £9,250 for anyone who started 2017/18-2024/25)
- Starting September 2025: No, you'll pay £9,535 for all years
Remember: Most graduates don't repay their loans in full. Higher tuition fees increase your debt, but only affect your actual repayments if you become a high earner who pays off the entire loan.
6% Interest Rate Cap on Plan 2 and Postgraduate Loans (1 September 2026)
In Force Now
From 1 September 2026, interest on Plan 2 and Postgraduate loans is capped at 6.0%, replacing the uncapped RPI + 3% formula that could otherwise reach 7.1% at the current March 2026 RPI of 4.1%. The cap applies for the 2026/27 academic year in England and Wales.
Plan 2 interest normally slides between RPI alone (4.1% for borrowers on £29,385 or less, at the current March 2026 RPI) and RPI + 3% for borrowers on £52,885 or more. Uncapped, the top of that scale is now 7.1%. Postgraduate loans charge RPI + 3% at every income level, also 7.1% uncapped. The cap now removes 1.1 percentage points rather than the 0.2 points it removed under the previous 3.2% RPI. The rule puts a ceiling of 6.0% under both, so no Plan 2 or Postgraduate borrower now pays more than 6.0% interest, however high their income.
Who This Affects
- Plan 2 borrowers in England (started September 2012 to August 2023) and Wales (started September 2012 onwards)
- Postgraduate Master's and Doctoral loan borrowers in England and Wales
- Does not apply to Plan 1, Plan 4, or Plan 5 borrowers, whose interest rates were not uncapped in the first place
Why This Happened
The cap was announced on 7 April 2026 by the Department for Education, to protect borrowers from inflation pressure. It stops Plan 2 and Postgraduate interest from tracking RPI + 3% without limit, and holds the ceiling at 6.0% for as long as the cap remains in force.
Source: GOV.UK, Interest rate cap introduced to protect Plan 2 borrowers
Lifelong Learning Entitlement (LLE)
New in 2027
A flexible way to fund higher education and skills training throughout your life - not just straight after school.
What Is the LLE?
The Lifelong Learning Entitlement is a new funding system that gives you £39,160 to use across your lifetime for higher education. That's equivalent to 4 years of full-time study at the current £9,790 fee cap, but you can use it flexibly.
Key Features
Equivalent to 4 years of funding across your lifetime
Take individual modules, not full degrees
Take breaks between learning periods
£25,000 threshold, 40-year write-off
Source: GOV.UK, How much LLE you could get (15 April 2026)
Who Can Use It?
- Available from age 18 to 60 for tuition loans
- No age limit for maintenance loans
- Must be used for approved higher education courses (Level 4-6)
- Can be used alongside apprenticeships or work
Important Dates
- September 2026: Applications open
- January 2027: LLE officially launches
- From 2027: Can start using your entitlement
How Is It Different from Traditional Student Loans?
| Feature | Traditional Loans | LLE |
|---|---|---|
| Course Structure | Full degrees only | Individual modules allowed |
| Study Pattern | Continuous study expected | Breaks allowed |
| Age Limit | Usually under 60 | Up to 60 for tuition |
| Total Available | Based on course length | £39,160 lifetime cap |
Maintenance Loans & Care Leaver Changes
Maintenance Loan Increase
Maintenance loans are increasing by 2.71% for the 2026-27 academic year. This matches the tuition fee increase and helps cover rising living costs.
Care Leavers - Important Change
From 2026-27, care leavers will automatically receive the maximum maintenance loan entitlement - regardless of household income.
This removes financial barriers for students who were previously in care and ensures they get the support they need.
Who Qualifies as a Care Leaver?
You're considered a care leaver if you were looked after by your local authority for at least 13 weeks after your 14th birthday, and were in care on or after your 16th birthday.
DSA Remains Frozen
The Disabled Students' Allowance (DSA) maximum remains at £27,783 per year. This covers specialist equipment, support workers, and other disability-related study costs.
What This Means For You
If You're Currently Repaying Plan 2
- Your monthly repayments will decrease slightly from April 2026
- The threshold freeze means your repayments will gradually increase over 4 years
- Use our calculator to see your exact repayment changes
- Consider whether voluntary overpayments make sense for your situation
If You're on Plan 5
- Your threshold stays at £25,000 - no change
- Tuition fee increase doesn't affect you if you started before 2026
- Your threshold increases with average earnings (typically faster than RPI)
- 40-year repayment period unchanged
If You're Starting University in 2026 or Later
- Tuition fees are £9,790 per year (up from £9,535 in 2025/26)
- Maintenance loans have increased by 2.71%
- You'll be on Plan 5 (£25,000 threshold, 40-year write-off)
- Consider whether the LLE might suit your needs better
- Care leavers automatically get maximum maintenance
If You're Considering the LLE
- Perfect if you want flexible, modular study
- Good for career changers or those upskilling
- Same repayment terms as Plan 5 (£25,000 threshold)
- Applications open September 2026
- Plan your learning journey before applying
Key Dates Timeline
New Repayment Thresholds Take Effect
Plans 1, 2, and 4 increase. Plan 2 freeze begins.
New Tuition Fees & LLE Applications Open
£9,790 fees start. LLE applications open for Jan 2027 start.
Lifelong Learning Entitlement Launches
First LLE students can start flexible modular courses.
Plan 2 Freeze Ends
Plan 2 threshold expected to resume increasing with inflation.
Calculate Your Repayments
See exactly how the 2026 changes affect your student loan repayments
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.
Related Resources
Repayment Thresholds Guide
Complete guide to UK student loan repayment thresholds and how they work.
Plan 2 Loans Explained
Everything you need to know about Plan 2 student loans and the threshold freeze.
Plan 5 Loans Guide
Detailed information about Plan 5 loans for students starting from 2023.
Student Loan Glossary
Definitions of key terms including the new LLE (Lifelong Learning Entitlement).