Postgraduate Loan Repayments: the Plan 3 Student Loan Explained

Written by Student Loan Calculator UK Editorial Team, reviewed by Student Loan Calculator UK Editorial Team · 5 October 2026

The Postgraduate Loan is one of five UK student loan plans and the only one that runs alongside another. Put your salary through the postgraduate loan calculator for your own monthly figure, or the combined repayment calculator if you also hold Plan 1, 2, 4 or 5.

Who has a Plan 3 student loan (Postgraduate Loan)?

Plan 3 is the Department for Education's designation for the Postgraduate Loan; its April 2026 announcement of the interest cap refers to “Plan 2 and Plan 3” loans. SLC and HMRC borrower-facing documents say Postgraduate Loan (often abbreviated PGL) instead, which is why the Plan 3 name looks unfamiliar on a payslip. It is a real plan with its own threshold and rate, not a gap in the numbering. The loan is available from Student Finance England to students who normally live in England, starting an eligible Master's or Doctoral course from academic year 2016/17 onwards. Wales, Scotland and Northern Ireland run their own separate postgraduate funding schemes with different amounts and rules. The Master's Loan maximum is £13,206; the Doctoral Loan maximum is £31,122 for courses starting on or after 1 August 2026, paid directly to you in instalments across the course. You must be under 60 at course start and meet residency rules. Use the Postgraduate Loan Amount Calculator to see your own entitlement by course length and start year, and the gap it leaves against your tuition fee and living costs.

Scottish students do not access this Plan 3 product. They use a separate SAAS Postgraduate Tuition Fee Loan with different terms (no maintenance component, lower thresholds). Northern Irish students use a separate NI Postgraduate Loan. PGL is the only UK student loan plan that requires you to also repay any undergraduate loan you already hold; the two stack rather than replacing each other. To check whether you should be on PGL, work through what student loan plan am I on.

Postgraduate loan repayments: threshold and 6% rate (2026-27)

The Postgraduate Loan threshold for 2026-27 is £21,000 annually, the same as 2024-25, 2025-26 and the same as 2016 when the loan was introduced. The threshold has been frozen for a decade and no rise has been announced. Postgraduate loan repayments are 6% of everything above it, taken by your employer through PAYE alongside any undergraduate deduction, or through Self Assessment if you work for yourself.

Postgraduate Loan interest rate

The PGL interest formula is RPI + 3% (7.1%), capped at 6% since 1 September 2026 both during study and after you finish. From 1 September 2026 the Department for Education capped Plan 2 and Postgraduate Loan interest at 6% for the 2026/27 academic year, so the headline PGL rate is 6% (cap in force since 1 September 2026; would otherwise be 7.1%). Unlike Plan 2, PGL does not slide with income; you always pay the full RPI + 3% up to the cap. Combined with the 6% repayment rate (lower than 9% undergrad), this means PGL balances grow faster than they shrink for most middle-income borrowers. The Institute for Fiscal Studies estimates only the top ~10% of PGL earners fully repay before the 30-year write-off.

Postgraduate Loan write-off rule

PGL balances are written off 30 years after the first 6 April following the end of your course. Death and permanent disability also trigger immediate cancellation. For a typical Master's graduate finishing in September 2024, the 30-year clock starts 6 April 2025 and write-off falls 6 April 2055. PhD graduates with longer courses see the write-off date pushed correspondingly later. Because the threshold is frozen and interest is RPI+3%, the majority of PGL balances are written off rather than fully repaid — making the structure operate more like a graduate tax surcharge than a conventional loan for most borrowers. Use our loan write-off checker for your exact date.

Worked example: £30,000 graduate on Postgraduate Loan

A PGL-only borrower (no undergraduate loan) earning £30,000 for 2026-27:

• Income above threshold: £30,000 − £21,000 = £9,000
• Annual PGL repayment: 6% × £9,000 = £540
• Monthly PGL repayment (PAYE): £45.00

However the typical PGL borrower also holds Plan 2 from undergrad. The stacked calculation:

• Plan 2 monthly (£30,000 salary): £4.61
• PGL monthly (£30,000 salary): £45.00
• Combined monthly deduction: £49.61

On a £30,000 salary the stacked deduction is roughly £49.61 per month, or about 2% of gross income. PGL repayments start at a lower salary than any undergraduate Plan (£21,000 vs £25,000 or more), so PGL bites first as career income grows.

Worked example: £50,000 graduate on Postgraduate Loan

A higher-earning PGL borrower on £50,000:

• Income above threshold: £50,000 − £21,000 = £29,000
• Annual PGL repayment: 6% × £29,000 = £1,740
• Monthly PGL repayment: £145.00

With a stacked Plan 2 + PGL on £50,000:

• Plan 2 monthly: £154.61
• PGL monthly: £145.00
• Combined monthly: £299.61

On a £50,000 salary a stacked Plan 2 + PGL borrower pays roughly £300 per month combined — the equivalent of an additional ~7.5% income tax band. This is the central economic reality of PGL: combined with an undergraduate Plan, it produces some of the highest marginal deduction rates in the UK tax system. Use the combined repayment calculator to model your exact figure.

Postgraduate Loan vs other Plans

PGL is structurally different from every undergraduate plan. The rate is 6% (not 9%), the threshold is £21,000 (the lowest of any UK plan), the interest is RPI + 3% with no sliding scale, and, uniquely, PGL is paid in addition to any undergraduate Plan rather than instead of it. On £40,000 in 2026-27 a Plan 1 + PGL borrower pays £193.25 monthly, a Plan 2 + PGL borrower pays £174.61, a Plan 4 + PGL borrower pays £141.54 (the lowest combined rate) and a Plan 5 + PGL borrower pays £207.50. Read the UG vs PG comparison or our full thresholds guide for every plan side-by-side.

FAQs

What is the Postgraduate Loan threshold for 2026-27?

The Postgraduate Loan (Plan 3) threshold for 2026-27 is £21,000 per year, £1,750 monthly and £403 weekly. You repay 6% of gross income above this level. The PGL threshold has been frozen at £21,000 since the loan was introduced in 2016.

Who can take out a Postgraduate Loan?

Students who normally live in England, starting an eligible Master's or Doctoral course from 2016/17 onwards. Master's Loan £13,206; Doctoral Loan £31,122 (courses starting on or after 1 August 2026). You must be under 60 at course start and meet UK residency rules. Welsh students apply to Student Finance Wales for a separate postgraduate loan with its own maximum, and Scottish and NI students access separate national postgraduate loan products. There is no separate maintenance loan for a master's: the Postgraduate Loan is the single contribution towards fees and living costs.

Why is the Postgraduate Loan rate 6% not 9%?

The Department for Education set Plan 3 at 6% so postgraduate borrowers holding both an undergraduate Plan and PGL would not face a combined marginal rate higher than 15%. Plan 2 (9%) + PGL (6%) = 15%. Raising PGL to 9% would have made the combined rate 18%, which was considered politically unviable in 2016.

Does Postgraduate Loan stack with my undergraduate loan?

Yes — this is the most important PGL fact. Postgraduate Loan repayments are paid in addition to any Plan 1, 2, 4 or 5 undergraduate repayments, not instead of them. In 2026-27 a Plan 2 + PGL borrower on £40,000 pays £79.61 plus £95.00 = £174.61 monthly combined.

What is the Postgraduate Loan interest rate?

PGL interest is fixed at RPI + 3% both during study and after you finish. Plan 2 and Postgraduate Loan interest is capped at 6% from 1 September 2026 for the 2026/27 academic year, so the headline PGL rate is 6% (cap in force since 1 September 2026; would otherwise be 7.1%). Unlike Plan 2, the rate does not slide with income.

When is a Postgraduate Loan written off?

PGL balances are written off 30 years from the first April after your course ends. Death and permanent disability also trigger immediate cancellation. For a 2020 Master's graduate, write-off falls in April 2051.

Can I pay off my Postgraduate Loan early?

Yes. Voluntary overpayments are accepted at any time with no penalty. However, the majority of PGL borrowers never fully repay because RPI+3% interest grows the balance faster than 6% repayments shrink it for typical earners. Overpayment is usually only worthwhile for sustained earners sustaining £60,000 or more who will fully repay.

Does Postgraduate Loan affect my credit score?

No. PGL does not appear on UK credit files. However, the combined PGL + undergraduate monthly deduction is counted by mortgage lenders as a fixed outgoing when assessing affordability, often reducing maximum borrowable amount by 5-10% versus a borrower with no student loans.

Postgraduate Loan optimization strategies

Because most PGL borrowers will never fully repay, voluntary overpayment is rarely the right move. The key optimization questions are: (1) should I take out a PGL at all if I can self-fund? — usually yes, because the income-contingent terms are far cheaper than commercial credit; (2) should I salary-sacrifice into pension to reduce the 6% deduction? — yes, every £100 sacrificed above £21,000 saves £6 in PGL deductions on top of normal tax relief; (3) should I delay starting the Master's until I have job-track income? — usually no, because the interest accrues while you delay anyway. For borrowers stacking Plan 2 + PGL who sustain incomes above £75,000, the combined 15% marginal rate makes voluntary repayment worth modelling carefully. Read our full PGL strategy guide for an income-based decision tree.