Skip to main content
GovMath.

Students & Graduates · 2025/26 threshold

Plan 2 Student Loan Calculator

Plan 2 is the loan plan for English and Welsh undergrads who started university between September 2012 and August 2023 — 9% of income above £28,470 (2025/26).

Your salary

£

Plan 2 covers English/Welsh undergrads who started 2012–2023. Threshold £28,470 (2025/26), rate 9% on the excess.

Plan 2 repayment

£49/mo

£588 per year

Calculation

  • Annual salary
    £35,000
  • Plan 2 threshold (2025/26)
    −£28,470
  • Income above threshold
    £6,530
  • Annual repayment (9%)
    £588

How we calculated your result

Repayment = 9% × (annual salary − £28,470). Below the threshold you owe £0 for that year. The threshold is pro-rated through the year via PAYE — so a December bonus that lifts you over could trigger a one-month deduction even if your annual salary is under.

Interest accrues at RPI + up to 3% depending on income, but interest doesn’t affect what you pay — only the balance. Repayments are income-driven, not balance-driven.

Official UK rules in simple English

  • Threshold £28,470 from 6 April 2025 (frozen until at least April 2027).
  • Repayment rate 9% on the excess. Collected via PAYE alongside Income Tax and NI, or via Self Assessment for self-employed.
  • Written off 30 years after the April you first became eligible to repay — most Plan 2 borrowers never repay in full.
  • Interest: RPI if you earn under £28,470; RPI + sliding up to RPI + 3% at £51,245+. Currently capped to keep rates fair vs commercial loans (the “Prevailing Market Rate Cap”).

Common pitfalls to watch out for

  • ⚠ Voluntary overpayments rarely make sense

    Because Plan 2 is income-driven and writes off after 30 years, paying it down early often means throwing money at a debt that would have been forgiven. Only worth it if you’re on a strong high-income trajectory and will clear it fully.

  • ⚠ Bonuses trigger one-off deductions

    If a single month’s pay × 12 lands above £28,470, PAYE will deduct 9% on the excess that month — even if you’re under £28,470 annually. You can reclaim via HMRC after year-end if you genuinely earned under the threshold.

  • ⚠ You don't pay it after leaving the UK — but you must tell SLC

    Going abroad? You must notify the Student Loans Company and set up an overseas repayment plan based on the country’s thresholds, or face penalties added to the balance.

  • ⚠ Don't confuse Plan 2 with Plan 5

    If you started uni in or after August 2023, you’re on Plan 5 — threshold £25,000 and 40-year write-off. Big difference. Check your SLC account.

Frequently asked questions

Do I pay if I'm self-employed?
Yes — calculated on your Self Assessment net profit, paid alongside your Income Tax bill on 31 January.
Can I have multiple plans?
Yes — most commonly Plan 2 (or 5) plus a Postgraduate Loan. They’re calculated separately, each with their own threshold.
Why doesn't my balance go down even though I pay?
Interest accrues monthly at potentially RPI + 3%. For most middle-earners, repayments barely cover interest, so balances grow. That’s by design — the 30-year write-off is the real mechanism.

Estimate based on 2025/26 thresholds. Actual PAYE deductions are calculated monthly, not annually.

Related calculators

More tools in Students & Graduates.