Frequently Asked Questions
What is the difference between Plan 1, 2, and 5?
Plan 1: pre-2012 starters (threshold £26,065, 25-year write-off). Plan 2: 2012-2023 starters (threshold £27,295, 30-year write-off). Plan 5: from September 2023 (threshold £25,000, 40-year write-off).
When do student loan repayments start?
Repayments start the April after you graduate or leave university, once you earn above the relevant threshold. Plan 2: £27,295/year; Plan 5: £25,000/year; Plan 1: £26,065/year.
What is the student loan repayment rate?
All plans charge 9% on earnings above the threshold. If you earn £35,000 on Plan 2: (£35,000 - £27,295) × 9% = £693/year or £57.75/month.
Will I repay my student loan in full?
Most Plan 2 students will not repay in full due to the 30-year write-off. Plan 5's 40-year write-off makes full repayment even less likely for many borrowers. Those with high salaries will repay in full.
Should I make voluntary overpayments on my student loan?
Only if you are certain you will repay in full before write-off — otherwise, the extra payments are wasted (the balance is written off regardless). High-earning graduates should calculate their trajectory before overpaying.
What interest rate is charged on student loans?
Plan 1: RPI. Plan 2: RPI + 0-3% (income-linked). Plan 5: RPI + 0% to +3% (income linked). Rates change annually. The interest rate significantly affects whether loans grow during low-earning years.
Does student loan debt affect my credit score?
No. Student loans are not commercial debts and do not appear on credit files. They do not affect mortgage affordability (the repayment is treated as a tax in mortgage calculations).
Does student loan repayment affect my mortgage?
Yes. Lenders deduct student loan repayments from disposable income when assessing affordability. This can reduce the mortgage amount you qualify for, even though the debt itself is off your credit file.
What is the Postgraduate Loan repayment?
Plan 3 (Postgraduate Loan) charges 6% on earnings over £21,000 for Master's graduates. It runs concurrently with any undergraduate loan repayments.
What happens to my student loan if I move abroad?
You must self-report your income and make equivalent payments based on overseas earnings. SLC assesses overseas income against repayment thresholds of the equivalent country.
Will the government change student loan terms?
Terms can change. The Plan 5 changes in 2023 significantly altered repayment for new students. Always check current government guidance as terms may change for future cohorts.
What is the Plan 4 Scottish student loan?
Plan 4 applies to Scottish students who started from 2021. Threshold is £31,395 (significantly higher). 25-year write-off. Interest rate is RPI only (no additional percentage).