Table of Contents
Student loan repayments for 2026/27 are 9% of your income above your plan’s threshold: £26,900 for Plan 1, £29,385 for Plan 2, £33,795 for Plan 4 and £25,000 for Plan 5. Postgraduate Loans are repaid at 6% of income above £21,000. Employees repay through PAYE, while the self-employed and anyone else who files a tax return pay through Self Assessment by 31 January.
What you repay depends on what you earn, not how much you borrowed. This guide sets out the 2026/27 thresholds, which plan you are on, how repayments are collected, what the self-employed need to know and worked examples for common incomes.
Student loan repayment thresholds for 2026/27
These thresholds apply from 6 April 2026 to 5 April 2027.
| Plan | Annual threshold | Monthly | Weekly | Rate |
|---|---|---|---|---|
| Plan 1 | £26,900 | £2,241.66 | £517.30 | 9% |
| Plan 2 | £29,385 | £2,448.75 | £565.09 | 9% |
| Plan 4 | £33,795 | £2,816.25 | £649.90 | 9% |
| Plan 5 | £25,000 | £2,083.33 | £480.76 | 9% |
| Postgraduate Loan | £21,000 | £1,750.00 | £403.84 | 6% |
The November 2025 Budget confirmed that the Plan 2 threshold will be frozen at its 2026/27 level for three years from April 2027, through to 2029/30. As pay rises, more Plan 2 borrowers will repay, and those already repaying will pay more.
Which student loan plan are you on?
You cannot choose your plan. It depends on where and when you started your course.
| Plan | Who it applies to |
|---|---|
| Plan 1 | England or Wales courses started before 1 September 2012, and all Northern Ireland students |
| Plan 2 | England courses started from 1 September 2012 to 31 July 2023, and Wales courses from 1 September 2012 |
| Plan 4 | Students funded by the Student Awards Agency Scotland |
| Plan 5 | England courses started on or after 1 August 2023 |
| Postgraduate Loan | Master’s and doctoral courses in England or Wales |
The earliest you start repaying is the April after you leave your course. For the first Plan 5 borrowers, that means repayments could begin from April 2026 if their income is over £25,000.
How student loan repayments are collected through PAYE
If you are employed, your employer takes student loan repayments from your pay along with tax and National Insurance, and shows them on your payslip. Your employer works out the deduction on each pay period separately, using the monthly or weekly threshold.
Points to watch:
- Each job is looked at separately. If you have two jobs, each employer only deducts if your pay in that job is over the threshold. Your incomes are not added together through payroll.
- Bonuses and overtime count. A large bonus in one month can mean a larger deduction that month, even if your annual pay is below the threshold.
- Check your plan type. Your employer needs the right plan from your P45 or starter checklist, otherwise you may be over or under deducted.
Your P60 shows the total deducted in the tax year.
Student loan repayments for the self-employed
If you are self-employed, or file a tax return for any other reason, HMRC works out your student loan repayments through Self Assessment, alongside your income tax. The amount is added to your tax bill and is due by 31 January after the end of the tax year. For 2026/27, that is 31 January 2028.
Self Assessment uses your total income, which includes:
- Self-employed profits.
- Employment income from all jobs combined.
- Rental profits.
- Unearned income, such as savings interest and dividends, but only if it is over £2,000. If it is over £2,000, all of it counts.
Any repayments already taken through payroll are deducted, so you only pay the balance. Because income from several sources is combined, people with a job plus a side business can owe a repayment they were not expecting. Our accountants for sole traders include student loan repayments in every tax estimate, so the January bill is not a surprise.
Paying more than one loan
If you have a Postgraduate Loan as well as an undergraduate loan, you repay both at once: 9% above the undergraduate threshold and 6% above the postgraduate threshold, a combined 15% on income above both. If you have two undergraduate plans, for example Plan 1 and Plan 2, you repay one combined 9% above the lowest threshold.
Worked examples of student loan repayments
These examples use 2026/27 thresholds for people in Bolton with income from one source unless stated.
| Person | Plan | Income | Annual repayment |
|---|---|---|---|
| Jack, a teacher in Farnworth | Plan 2 | £35,000 salary | £505.35 |
| Priya, a graduate trainee in Bolton | Plan 5 | £30,000 salary | £450.00 |
| Tom, an engineer in Westhoughton | Plan 2 and Postgraduate | £40,000 salary | £2,095.35 |
| Karen, a self-employed bookkeeper | Plan 1 | £45,000 profit | £1,629.00 |
How the figures work:
- Jack: (£35,000 − £29,385) × 9% = £505.35, about £42 a month through payroll.
- Priya: (£30,000 − £25,000) × 9% = £450.
- Tom: (£40,000 − £29,385) × 9% = £955.35, plus (£40,000 − £21,000) × 6% = £1,140.
- Karen: (£45,000 − £26,900) × 9% = £1,629, paid with her tax bill by 31 January 2028.
Worked example: a job plus a side business
Ryan is a nurse at a Bolton hospital earning £28,000 and has Plan 2. He also earns £8,000 profit from personal training in the evenings.
| Amount | |
|---|---|
| Deducted through payroll (salary below £29,385) | £0 |
| Total income for Self Assessment | £36,000 |
| Repayment due: (£36,000 − £29,385) × 9% | £595.35 |
| Payable by 31 January 2028 | £595.35 |
Ryan pays nothing through his salary, but once his side income is added on his tax return he owes £595.35. This catches out many people with a second income. Use our employed and self-employed tax calculator to estimate the tax on both incomes.
Interest and when the loan is written off
Interest is added from the day you receive the loan, even if you are not earning enough to repay. From 1 September 2026 to 31 August 2027, interest on Plan 2 and Postgraduate Loans is capped at 6%. Any balance left is cancelled after a set period:
- Plan 1 (loans from September 2006): 25 years after repayments were first due.
- Plan 2 and Postgraduate Loans: 30 years.
- Plan 5: 40 years.
Voluntary extra payments are allowed with no penalty, but they are not refundable, so think carefully before overpaying a loan that may be written off.
Frequently asked questions
What is the student loan repayment threshold for 2026/27?
It is £26,900 for Plan 1, £29,385 for Plan 2, £33,795 for Plan 4, £25,000 for Plan 5 and £21,000 for Postgraduate Loans. You repay 9%, or 6% for Postgraduate Loans, of income above the threshold.
Do self-employed people pay student loan repayments?
Yes. Student loan repayments for the self-employed are calculated on the Self Assessment return and paid with your tax bill by 31 January after the tax year. See our Self Assessment deadline guide.
Do dividends count towards student loan repayments?
Yes, if your total unearned income, such as dividends and interest, is over £2,000 and you file a tax return. Company directors who take a low salary and dividends often make most of their student loan repayments through Self Assessment for this reason. Our guide to a tax-efficient director salary explains the salary and dividend mix.
Do I pay student loan on two jobs?
Each employer only deducts if your pay from that job is over the threshold. If you file a tax return, HMRC combines your income and you may owe more.
Is the Plan 2 threshold frozen?
Yes. It is £29,385 for 2026/27 and will stay frozen at that level for the 2027/28, 2028/29 and 2029/30 tax years.
Get help with your tax and student loan
Student loan repayments are easy to overlook when you have more than one income, run a company or start working for yourself. Cangaf’s ACCA-qualified team in Bolton prepares Self Assessment tax returns that include every repayment correctly, and plans director pay with student loans in mind. Request a fixed-fee quote.
Official guidance: Repaying your student loan: how much you repay, Rates and thresholds for employers 2026 to 2027, Tell HMRC about a student loan in your tax return and Student loans: terms and conditions 2026 to 2027.
