Plan 1 Student Loans
Complete guide to pre-2012 student loans in England and Wales
Plan 1 Loan at a Glance
Who has Plan 1?
Students who started university before September 2012 in England or Wales, or Northern Irish students at any time.
Repayment Threshold
£22,015 per year (£1,834 monthly, £423 weekly)
Repayment Rate
9% of income above the threshold
Interest Rate
Lower of RPI or Bank of England base rate plus 1%
Written Off
25 years after the April after graduation, or when you turn 65 (whichever comes first)
When Repayments Start
The April after leaving your course, and only when income is above the threshold
How Plan 1 Student Loans Work
Plan 1 student loans were provided to students who started university before September 2012 in England and Wales. They're also the standard loan plan for all Northern Irish students regardless of when they studied. These loans covered both tuition fees (which were lower, typically around £3,000 per year) and maintenance costs.
Key Features of Plan 1 Loans
Like all UK student loans, Plan 1 repayments are income-contingent, meaning you only repay when earning above the threshold. Key features that differentiate Plan 1 from newer plans include:
- Lower repayment threshold (£22,015 compared to £27,295 for Plan 2)
- Lower interest rates (capped at the lower of RPI or Bank of England base rate plus 1%)
- Shorter repayment period (25 years vs 30 years for Plan 2)
- Generally smaller loan amounts (due to lower tuition fees)
These differences mean that Plan 1 loans may be relatively easier to repay in full compared to the newer loan plans, although the lower threshold means you'll start repaying sooner and at lower income levels.
Plan 1 Repayment Calculator
To estimate your Plan 1 loan repayments, use our Plan 1 calculator. You can also check our Total Loan Cost Calculator to estimate whether you're likely to repay your loan in full before it's written off.
Plan 1 Repayment Calculations
How Much Will You Repay Each Month?
For Plan 1 loans, you repay 9% of your income above the threshold of £22,015 per year. Here's how to calculate your monthly repayment:
- Take your annual salary before tax
- Subtract the annual threshold (£22,015)
- If the result is zero or negative, your repayment is £0
- If positive, multiply by 9%
- Divide by 12 to get your monthly repayment
Example Calculation
For someone earning £30,000 per year:
- Annual salary: £30,000
- Minus threshold: £30,000 - £22,015 = £7,985
- Multiply by 9%: £7,985 × 0.09 = £718.65 per year
- Divide by 12: £718.65 ÷ 12 = £59.89 per month
Repayment Table for Different Salaries
| Annual Salary | Monthly Plan 1 Repayment | Annual Plan 1 Repayment |
|---|---|---|
| £20,000 | £0 | £0 |
| £25,000 | £22.40 | £268.65 |
| £30,000 | £59.89 | £718.65 |
| £35,000 | £97.38 | £1,168.65 |
| £40,000 | £134.88 | £1,618.65 |
| £50,000 | £209.86 | £2,518.35 |
Note that Plan 1 repayments begin at a lower salary than other loan plans, which may impact your take-home pay more significantly at lower income levels.
Plan 1 Interest Rates
One of the most favorable aspects of Plan 1 loans is their interest rate formula, which is typically lower than that of newer plans. For Plan 1 loans, the interest rate is set at the lower of:
- The Retail Price Index (RPI) inflation rate, or
- The Bank of England base rate plus 1%
This means that during periods when the base rate is low, Plan 1 borrowers can benefit from very favorable interest rates. Interest is calculated daily and applied to your balance monthly.
Current Plan 1 Interest Rate
The current interest rate for Plan 1 loans is 7.1% (from September 2023). Interest rates are updated annually, typically in September.
Unlike Plan 2 and Plan 5 loans, Plan 1 interest rates do not vary based on your income. The same rate applies to all Plan 1 borrowers regardless of salary.
Historical Plan 1 Interest Rates
Plan 1 interest rates have varied considerably over time, reflecting changes in RPI and the Bank of England base rate:
| Time Period | Plan 1 Interest Rate |
|---|---|
| Sep 2022 - Aug 2023 | 2.75% |
| Sep 2021 - Aug 2022 | 1.1% |
| Sep 2020 - Aug 2021 | 1.1% |
| Sep 2019 - Aug 2020 | 1.75% |
For help understanding how interest affects your loan over time, try our Student Loan Interest Calculator.
Plan 1 Loan Cancellation and Write-off
Plan 1 loans are automatically cancelled under the following conditions:
- 25 years after repayments began - typically the April after you graduated
- When you reach age 65 (whichever comes first)
- If you become permanently disabled and unable to work
- If you pass away
The 25-year cancellation period for Plan 1 is shorter than the 30-year period for Plan 2 and the 40-year period for Plan 5, providing Plan 1 borrowers with earlier loan relief if they haven't repaid in full.
Calculate Your Write-off Date
To find your specific write-off date, use our Loan Write-off Checker. Simply enter your graduation year and loan plan to see when your loan will be automatically cancelled.
How Plan 1 Compares to Other Loan Plans
Plan 1 has several differences compared to the newer loan plans. Here's a quick comparison:
| Feature | Plan 1 | Plan 2 | Plan 5 |
|---|---|---|---|
| When introduced | Before 2012 | 2012-2023 | From 2023 |
| Repayment threshold | £22,015 | £27,295 | £25,000 |
| Interest rate | Lower of RPI or base rate+1% | RPI to RPI+3% | RPI only |
| Write-off period | 25 years | 30 years | 40 years |
| Typical loan size | £12,000-£25,000 | £40,000-£60,000 | £40,000-£60,000 |
For a detailed comparison between Plan 1 and Plan 2, visit our Plan 1 vs Plan 2 comparison page.
What If I Have Multiple Loan Plans?
If you studied for multiple qualifications (for example, an undergraduate degree before 2012 and a postgraduate course after), you may have multiple loan plans. In this case:
- You'll make repayments toward both loans simultaneously
- Each loan will follow its own repayment rules
- Your effective repayment rate could be higher (e.g., 9% for Plan 1 plus 6% for a Postgraduate Loan)
Use our Combined Repayment Calculator to understand how multiple loans affect your monthly repayments.
Frequently Asked Questions about Plan 1 Loans
Can I pay off my Plan 1 loan early?
Yes, you can make voluntary repayments at any time. For Plan 1 loans, with their lower interest rates and shorter repayment terms, it may be financially advantageous to pay off early if you have the means to do so. However, always consider your broader financial situation - paying off higher-interest debts like credit cards or building an emergency fund often takes priority.
What happens to my Plan 1 loan if I move abroad?
If you move abroad, you\'ll still be responsible for repaying your student loan. You\'ll need to inform the Student Loans Company of your move and provide evidence of your income. The repayment threshold will be adjusted based on the cost of living in your new country of residence. If you don't keep the SLC informed, they may apply a default monthly repayment rate.
Does my Plan 1 loan affect my credit score?
No, your student loan does not appear on your credit file and does not affect your credit score. However, lenders may consider your student loan repayments when assessing your affordability for mortgages or other loans, as they impact your monthly outgoings.
Can Plan 1 loans be written off if I declare bankruptcy?
No, student loans (including Plan 1) cannot be written off through bankruptcy in the UK. They are specifically excluded from debts that can be discharged through bankruptcy proceedings. You'll continue to be liable for your student loan repayments based on your income.
Ready to Calculate Your Plan 1 Loan?
Use our calculators to see how much you're likely to repay and when your loan might be written off