Earning £30k with Plan 2 Loans: Complete Repayment Timeline
A full 30 year projection, computed from the published thresholds, showing what the frozen £29,385 threshold does to a graduate who never gets a real pay rise
Key Takeaways
- Year one of this projection is 2023-24, when the Plan 2 threshold was £27,295. A £30,000 salary sits £2,705 above it, so the repayment is £243 for the year, about £20.29 a month.
- The threshold is frozen at £29,385 for 2027-28, 2028-29 and 2029-30. Across those three years this borrower's annual repayment climbs from £306 to £579, a rise of 89% in cash and 68% after inflation, on a salary that never rises in real terms.
- The balance never falls. Interest of £144,313 over 30 years swamps total repayments of £21,998, so the £52,000 opening balance reaches £174,314 and is written off in April 2053. The loan is never repaid in full.
- Run the same model with the threshold uprated every April instead of frozen and lifetime repayments fall to £13,316. The freeze therefore takes about £8,683 more out of this borrower over 30 years while reducing the written-off balance by only £-2,372.
- Voluntary overpayment buys nothing here. Repayments are set by income, not by balance, so putting £10,000 in at the start leaves lifetime repayments unchanged at £21,998 and only shrinks the amount the government was going to write off anyway.
In this article
Thirty thousand pounds is a common graduate salary in education, the public sector, marketing, administration and entry-level professional services. On Plan 2 it sits only a little way above the repayment threshold, which produces the outcome most borrowers find hardest to believe: you pay every month, on time, for three decades, and the balance goes up every single year. This page projects that in full, from 2023-24 through to write-off in April 2053.
The table further down is not a set of illustrative round numbers. It is generated from the model described in the assumptions section, using the Plan 2 thresholds that HMRC has actually published for 2024-25, 2025-26 and 2026-27, the 9% repayment rate, the Plan 2 variable interest scale, and the announced freeze of the threshold at £29,385 from April 2027. Every row can be checked with two lines of arithmetic.
The freeze is the reason this scenario is worth modelling rather than guessing. A threshold that does not move while wages do means the slice of your pay that is exposed to the 9% deduction widens every April, even if your pay rise only just matches inflation. For this borrower that alone nearly doubles the annual repayment inside three years, and it also pushes the interest rate up, because Plan 2 sets interest on a sliding scale measured from the same frozen threshold.
One clarification before the numbers, because the two are easily confused. If you are earning exactly £30,000 right now, in the 2026-27 tax year, you are £615 above the £29,385 threshold and repay £55 a year, about £4.61 a month. The borrower modelled below started on £30,000 in 2023-24 and has had three pay rises since, so by 2026-27 they are on £32,782 and repay £306 a year.
Scenario Overview
This scenario follows a graduate with a typical Plan 2 loan who started work on thirty thousand pounds and stayed on an ordinary, unspectacular pay curve.
Graduate Profile
- Degree: Three-year undergraduate degree at an English university, 2019 to 2022
- Course ended: Summer 2022, so repayments start in the first April afterwards, April 2023
- Opening balance (April 2023): £52,000
- Tuition fees: £27,750 (£9,250 for each of three years, the fee cap for that cohort)
- Maintenance loans: £18,500 (living away from home)
- Interest while studying: £5,750 (RPI plus 3% over three years)
- Starting salary (2023-24): £30,000
- Loan plan: Plan 2, 30 year write-off, so the balance is cancelled in April 2053
- Repayment threshold now (2026-27): £29,385
Key Financial Parameters
The Plan 2 threshold for 2026-27 is £29,385, and it is frozen at that level for the three tax years from April 2027. You repay 9% of everything you earn above it. Interest is charged on a sliding scale: RPI at or below £29,385, rising in a straight line to RPI plus three percentage points at £52,885 and above. In 2026-27 this borrower is on £32,782, near the bottom of that band, so the modelled rate is 4.53%, not the 7.1% that applies to high earners.
A separate 6% cap on Plan 2 and Plan 3 interest took effect on 1 September 2026 for the 2026/27 academic year, announced on 7 April 2026 by the Department for Education and Baroness Smith of Malvern. It never binds in this scenario, because the modelled rate peaks at 4.92%. It matters a great deal to borrowers earning above £52,885, and not at all here.
Critical Scenario Insight
In year one the repayment is £243 and the interest charge is £2,325. The gap of £2,082 is added to the balance, which grows by 4.0% in the first year alone. That gap never closes at this income. By the final year the repayment has reached £1,143 but the interest charge has reached £8,230, so the balance is still climbing on the day it is cancelled. This is the textbook case where accepting write-off is the correct strategy, not a sign that something has gone wrong.
The Model and Its Assumptions
Two things are published and fixed: the Plan 2 thresholds up to 2026-27, and the freeze that follows. Everything else more than a few years out is an assumption, and all of them are listed here so the projection can be checked or disagreed with.
Every Input Used
| Input | Value used | Published or assumed |
|---|---|---|
| Repayment rate | 9% of income above the threshold | Published |
| Thresholds 2023-24 to 2026-27 | £27,295, £27,295, £28,470, £29,385 | Published by HMRC |
| Thresholds 2027-28 to 2029-30 | Frozen at £29,385, no April uprating | Announced, Autumn Budget 2025 |
| Thresholds from April 2030 | Uprated 3.0% a year, rounded to the nearest £5 | Assumed. Nothing is published past the freeze |
| Salary growth | 3.0% a year in cash terms, every year | Assumed. See the note below |
| RPI | 4.1% held flat for all 30 years | March 2026 RPI, held constant by assumption |
| Interest scale | RPI to RPI plus 3 points, straight line across the band | Published structure |
| Upper interest band | 1.7997 times the threshold, the published 2026-27 ratio | Assumed for years with no published band |
| Interest cap | 6% from 2026-27 onwards | Announced for 2026/27, assumed to continue. Never binds here |
| Write-off | 30 years from April 2023, the first April after the course ended | Published rule |
| Interest timing | Charged on the opening balance, repayment deducted at year end | Simplification. Slightly overstates interest |
Closing balance = opening balance × (1 + interest rate) − repayment. Repayment = 9% × (salary − threshold), floored at zero. Those two lines reproduce every row of the table below.
Why 3.0% Salary Growth
Salary grows at 3.0% a year in cash terms, marginally below the 4.1% RPI used throughout, so this graduate gets a normal looking annual rise and no real terms pay increase at all over 30 years.
That is deliberate. It is close to the long run average of ONS whole economy earnings growth, and it strips out the one thing that would otherwise muddy the picture. If the salary rose faster than prices, you could not tell whether the rising repayments came from the borrower getting richer or from the threshold standing still. Holding real pay flat means every increase you see in the repayment column is caused by policy, not by promotion.
The consequence is that the salary reaches £70,697 by 2052-53, which sounds like a substantial career, and in 2026 prices is worth about £24,870, which is not. Every cash figure on this page is in the money of its own year unless it is explicitly labelled otherwise. A variation with 5% growth is included at the end of this page, and the other repayment scenarios cover steeper career paths.
The Assumption That Matters Most After 2030
The freeze runs from April 2027 to April 2030, covering the 2027-28, 2028-29 and 2029-30 tax years. No government has said what happens after that. This model assumes uprating resumes in April 2030 at 3.0% a year, the same rate as the salary assumption, which is the neutral choice: from 2030-31 onwards the gap between pay and threshold then stops widening, and the repayment stays flat in real terms for the remaining twenty-two years. If a future government extends the freeze, repayments rise further and this projection understates them. If thresholds are uprated faster than earnings, repayments fall and it overstates them. Only the years from 2030-31 onwards move either way.
Year-by-Year Projection
All thirty years, from the first repayment year to write-off. The three shaded rows are the frozen threshold years. Note the threshold column: it rises in April 2025 and April 2026, stops dead for three years, and then resumes on the assumption set out above.
| Yr | Tax year | Salary | Threshold | Above it | Repaid | Rate | Interest | Closing balance |
|---|---|---|---|---|---|---|---|---|
| 1 | 2023-24 | £30,000 | £27,295 | £2,705 | £243 | 4.47% | £2,325 | £54,082 |
| 2 | 2024-25 | £30,900 | £27,295 | £3,605 | £324 | 4.60% | £2,485 | £56,243 |
| 3 | 2025-26 | £31,827 | £28,470 | £3,357 | £302 | 4.54% | £2,555 | £58,495 |
| 4 | 2026-27(now) | £32,782 | £29,385 | £3,397 | £306 | 4.53% | £2,652 | £60,842 |
| 5 | 2027-28 | £33,765 | £29,385 * | £4,380 | £394 | 4.66% | £2,835 | £63,282 |
| 6 | 2028-29 | £34,778 | £29,385 * | £5,393 | £485 | 4.79% | £3,030 | £65,827 |
| 7 | 2029-30 | £35,822 | £29,385 * | £6,437 | £579 | 4.92% | £3,240 | £68,487 |
| 8 | 2030-31 | £36,896 | £30,265 | £6,631 | £597 | 4.92% | £3,371 | £71,261 |
| 9 | 2031-32 | £38,003 | £31,175 | £6,828 | £615 | 4.92% | £3,507 | £74,154 |
| 10 | 2032-33 | £39,143 | £32,110 | £7,033 | £633 | 4.92% | £3,650 | £77,171 |
| 11 | 2033-34 | £40,317 | £33,075 | £7,242 | £652 | 4.92% | £3,798 | £80,317 |
| 12 | 2034-35 | £41,527 | £34,065 | £7,462 | £672 | 4.92% | £3,953 | £83,598 |
| 13 | 2035-36 | £42,773 | £35,085 | £7,688 | £692 | 4.92% | £4,115 | £87,021 |
| 14 | 2036-37 | £44,056 | £36,140 | £7,916 | £712 | 4.92% | £4,283 | £90,591 |
| 15 | 2037-38 | £45,378 | £37,225 | £8,153 | £734 | 4.92% | £4,459 | £94,316 |
| 16 | 2038-39 | £46,739 | £38,340 | £8,399 | £756 | 4.92% | £4,642 | £98,202 |
| 17 | 2039-40 | £48,141 | £39,490 | £8,651 | £779 | 4.92% | £4,833 | £102,257 |
| 18 | 2040-41 | £49,585 | £40,675 | £8,910 | £802 | 4.92% | £5,033 | £106,488 |
| 19 | 2041-42 | £51,073 | £41,895 | £9,178 | £826 | 4.92% | £5,241 | £110,903 |
| 20 | 2042-43 | £52,605 | £43,155 | £9,450 | £851 | 4.92% | £5,458 | £115,511 |
| 21 | 2043-44 | £54,183 | £44,445 | £9,738 | £876 | 4.92% | £5,685 | £120,320 |
| 22 | 2044-45 | £55,809 | £45,780 | £10,029 | £903 | 4.92% | £5,922 | £125,339 |
| 23 | 2045-46 | £57,483 | £47,155 | £10,328 | £930 | 4.92% | £6,169 | £130,578 |
| 24 | 2046-47 | £59,208 | £48,570 | £10,638 | £957 | 4.92% | £6,426 | £136,047 |
| 25 | 2047-48 | £60,984 | £50,025 | £10,959 | £986 | 4.92% | £6,696 | £141,757 |
| 26 | 2048-49 | £62,813 | £51,525 | £11,288 | £1,016 | 4.92% | £6,977 | £147,718 |
| 27 | 2049-50 | £64,698 | £53,075 | £11,623 | £1,046 | 4.92% | £7,270 | £153,942 |
| 28 | 2050-51 | £66,639 | £54,665 | £11,974 | £1,078 | 4.92% | £7,577 | £160,441 |
| 29 | 2051-52 | £68,638 | £56,305 | £12,333 | £1,110 | 4.92% | £7,896 | £167,227 |
| 30 | 2052-53 | £70,697 | £57,995 | £12,702 | £1,143 | 4.92% | £8,230 | £174,314 |
| 30 year totals | £21,998 | £144,313 | £174,314 written off | |||||
* Threshold frozen at £29,385, no April uprating. All figures are in the cash of their own tax year. Rounded to the nearest pound for display; the model itself carries pence.
Three Things Worth Reading Twice
The repayment went down in 2025-26. It fell from £324 to £302, because the threshold rose by £1,175 in April 2025 while the pay rise was only £927. An uprated threshold can genuinely cut what you pay. That is exactly the mechanism the freeze removes.
The interest rate rises during the freeze too. It goes from 4.53% in 2026-27 to 4.92% by 2029-30, not because RPI moved in this model, but because the Plan 2 sliding scale is measured from the same frozen threshold. Standing still relative to a frozen line pushes you further up the interest band.
The balance never turns. There is no crossover year where the repayment overtakes the interest charge. In year one the repayment covers 10% of the interest, and thirty years later, after every pay rise and the whole freeze, it still only covers 14%. A balance that grows every year is the designed outcome at this income, not a sign of a missed payment.
What the Threshold Freeze Does
This is the part of the projection that is specific to right now. From April 2027 the Plan 2 threshold does not move for three tax years, while pay carries on rising with prices. Each April the borrower is further above a line that has stopped moving, so the 9% deduction applies to a wider slice of pay. The repayment rises in real terms without a single real terms pay rise.
The Freeze Years, With and Without Inflation
| Tax year | Threshold | Salary | Income above threshold | Repayment | Repayment in 2026-27 money |
|---|---|---|---|---|---|
| 2026-27 | £29,385 | £32,782 | £3,397 | £306 | £306 |
| 2027-28frozen | £29,385 | £33,765 | £4,380 | £394 | £379 |
| 2028-29frozen | £29,385 | £34,778 | £5,393 | £485 | £448 |
| 2029-30frozen | £29,385 | £35,822 | £6,437 | £579 | £514 |
| 2030-31 | £30,265 | £36,896 | £6,631 | £597 | £508 |
The last column is the one that matters. Adjusted for inflation, the repayment rises 68% across the three frozen years and then goes flat once uprating resumes. All of the real terms increase in this borrower's student loan deduction over thirty years happens inside the freeze.
The Same Model Without the Freeze
Rerunning the projection with the threshold uprated 3.0% every April from 2027, and changing nothing else, gives a repayment of £334 in 2029-30 rather than £579, and lifetime repayments of £13,316 rather than £21,998. The freeze costs this borrower about £8,683 over the life of the loan.
The striking part is what it does not achieve. The balance written off falls by only £-2,372, from £171,942 to £174,314. Because the repayments are so much smaller than the interest, taking more from a near-threshold earner barely dents the balance. For borrowers in this income range the freeze functions as a tax rise, not as debt recovery. Higher earners, whose repayments do clear their balances, are where a frozen threshold actually recovers money.
Lifetime Cost Analysis
The totals across all thirty years, taken straight from the table above.
Total Lifetime Repayment Summary
Reading Those Numbers Properly
Thirty years of faithful repayment comes to £21,998, which is 48% of the £46,250 originally borrowed and 15% of the interest charged along the way. The borrower never repays a single pound of principal in any meaningful sense, because the interest bill is larger than the repayment in all thirty years.
The £174,314 written off in April 2053 is a 2053 cash figure. Deflated to 2026-27 prices at the 4.1% RPI used throughout, it is worth roughly £61,322 in today's money. So the balance grows 3.4 times over in cash while rising only about 18% in real terms. Headlines about six figure student debts are almost always describing the cash number.
Averaged across thirty years the repayment is £733 a year, about £61 a month. For this borrower Plan 2 is not a loan in any ordinary sense. It is a 9% surcharge on earnings above a threshold, running for thirty years and then stopping, and the sensible way to plan around it is as a payroll deduction rather than as a debt to be cleared.
The Same Model at Other Starting Salaries
Identical opening balance, identical assumptions, only the starting salary changes.
| Starting salary (2023-24) | Salary by 2052-53 | Total repaid | Written off | Outcome |
|---|---|---|---|---|
| £25,000 | £58,914 | £1,445 | £173,721 | Never cleared, written off at year 30 |
| £30,000 (this scenario) | £70,697 | £21,998 | £174,314 | Never cleared, written off at year 30 |
| £35,000 | £82,480 | £43,408 | £173,835 | Never cleared, written off at year 30 |
| £45,000 | £106,045 | £86,225 | £106,212 | Never cleared, written off at year 30 |
| £55,500 | £130,789 | £131,184 | £5,521 | Never cleared, written off at year 30 |
With a £52,000 opening balance and 3.0% pay growth, the loan is only cleared inside thirty years if the graduate starts on roughly £55,500, and even then it clears in the very last year. Everything below that is a write-off, and the amount written off barely varies between a £25,000 start and a £35,000 start.
Strategic Decisions
Two decisions follow from the projection: whether to overpay, and what to do with the money instead.
Should You Make Voluntary Overpayments?
No, and the model shows exactly why. Plan 2 repayments are calculated from income alone, never from the balance. Rerunning the projection with £10,000 paid in on day one, so the opening balance is £42,000 instead of £52,000, changes lifetime repayments not at all: still £21,998, the same monthly deduction in every one of the thirty years. All the overpayment does is cut the amount eventually written off, from £174,314 to £132,827. The borrower pays £10,000 to reduce a number that was going to be cancelled anyway.
The same £10,000 invested for thirty years at a 7% average return would grow to roughly £76,000 before tax and charges. Even at a cash savings rate it beats an overpayment that returns literally nothing. Overpaying only makes sense for borrowers who will clear the balance before write-off, which on this model means starting around £55,500 or better, and even then only after pension contributions and employer matching have been used up. Check your own position with the overpayment calculator.
The one honest argument for overpaying at this income is psychological. Watching a balance rise from £52,000 to £174,314 is genuinely uncomfortable, and some people would pay for that to stop. That is a purchase of peace of mind, not an investment, and it is worth being clear with yourself about which one you are making.
Optimal Savings Priority
First, an emergency fund of three to six months of expenses in an instant access account. Second, enough pension contribution to capture the full employer match, which is an immediate return no other option comes close to. Third, a housing deposit if buying is the plan. Fourth, the ISA allowance for tax free growth.
Student loan overpayments come after all of those, and on this projection they do not really belong on the list at all. The deduction of £306 a year in 2026-27 is real money and worth budgeting for, but it is a payroll line, not a debt with a payoff date.
Career Development Investment
A pay rise is worth far more than an overpayment. Moving from £32,782 to £35,000 in 2026-27 adds about £200 a year to the student loan deduction, which is 9% of the increase, and leaves the rest to income tax, National Insurance at the 8% main rate and take-home pay. Qualifications, certifications and moving employer all pay back better than an overpayment that, on these numbers, returns nothing at all.
Scenario Variations
Each variation below is the same model with one input changed, so the figures are directly comparable with the baseline of £21,998 repaid and £174,314 written off.
Five Year Career Break
Setting income to zero for years 8 to 12, a five year break for childcare or care responsibilities in the early 2030s, cuts lifetime repayments from £21,998 to £18,831, a saving of £3,168. Interest keeps accruing throughout the break, so the balance written off rises from £174,314 to £174,620.
The borrower is financially better off for the loan, because they pay less and the larger balance is cancelled anyway. This is a real feature of the system for anyone heading for write-off, though it is obviously not a reason to take a career break. It matters far more to high earners who would otherwise have cleared their balance. See the career breaks and part-time work guide.
Faster Career Progression
Raising salary growth from 3.0% to 5% a year, which is real progression rather than inflation matching, takes the salary to £46,540 by year 10 and £123,484 by year 30 in cash terms. Lifetime repayments more than triple, to £72,930.
Even that is not enough to clear the loan: £141,765 is still written off. The compounding on a balance this size, starting this far above what a near-threshold earner can repay, is very hard to outrun once the first decade has been spent paying less than the interest.
Permanent Part-Time Work
Dropping permanently to 60% of full time, a starting salary of £18,000 rising at the same 3.0% a year, produces a repayment of exactly £0 across the whole thirty years. The salary never catches the threshold: it reaches £42,418 by 2052-53 against a modelled threshold of £57,995. Interest accrues at RPI throughout, because income never enters the sliding band, and £173,590 is written off. Part-time work has no loan downside for a borrower in this range, since the balance was never going to be cleared.
The loan is never repaid, and the frozen threshold is what changes between now and 2030
On this model a graduate who starts on £30,000 in 2023-24 repays £21,998 over thirty years, is charged £144,313 in interest, and has £174,314 cancelled in April 2053. There is no year in which the balance falls. The single largest change to what this borrower actually pays comes from the threshold freeze between April 2027 and April 2030: it lifts the annual repayment from £306 to £579 in three years, a 68% increase after inflation on a salary that gets no real rise at all, and adds about £8,683 to lifetime repayments while reducing the written-off balance by only £-2,372. The practical conclusion is unchanged by any of the assumptions you might want to argue with: budget for the deduction, do not overpay, and treat Plan 2 at this income as a 9% charge on earnings above the threshold that ends in April 2053.
For comparison scenarios, see our analyses of teacher salary progression and minimum wage outcomes.
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.