If you earn above the repayment threshold for your plan, 9% of everything above it goes to your student loan — deducted automatically through PAYE alongside tax and National Insurance. The hard part is knowing which plan you're on, because the thresholds differ by thousands of pounds.
Student loan repayment thresholds in 2026
Repayments are 9% of earnings above your plan's threshold, taken through the payroll. Current thresholds for employees in England and Wales (2026/27 rates, carried into 2026):
| Plan | Annual threshold | Monthly threshold | Repayment |
|---|---|---|---|
| Plan 1 | £26,900 | £2,242 | 9% above it |
| Plan 2 | £29,385 | £2,449 | 9% above it |
| Plan 4 (Scotland) | £33,795 | £2,816 | 9% above it |
| Plan 5 (England, courses from Sept 2023) | £25,000 | £2,083 | 9% above it |
| Postgraduate | £21,000 | £1,750 | 6% above it |
Which plan you're on depends on when and where you started your course: Plan 1 for loans from 1998–2012, Plan 2 for English and Welsh courses from 2012 onwards, Plan 4 for Scottish loans. If you have both Plan 1 and Plan 2 loans, you repay both once you pass the Plan 1 threshold.
How much do you actually repay each month?
Worked examples at common salaries, showing the monthly student loan deduction for a Plan 2 borrower:
| Gross salary | Plan 2 deduction |
|---|---|
| £30,000 | £20.25 |
| £40,000 | £95.25 |
| £50,000 | £170.25 |
| £60,000 | £245.25 |
So a £50,000 salary pays about £170 a month — meaningful, but capped: you never repay more than 9% of the slice above the threshold, however large the loan balance. See the exact combined effect of tax, National Insurance and student loan on any salary in the UK salary calculator, or the worked £50k example on our £50,000 after tax page.
Plan 2 vs Plan 1: why the plan matters
Plan 1 borrowers repay at the same 9% rate, but from a lower threshold — so they start repaying sooner and pay more each month. The trade-off is that Plan 1 loans typically have much smaller balances. Plan 2 borrowers benefit from the higher threshold and, from the 2026/27 tax year, the RPI-based interest rate is capped so most earn far less interest than before. Both plans are written off: Plan 1 at 65 or 25 years after the first April of repayment, Plan 2 after 30 years.
Frequently asked questions
What is the student loan repayment threshold for Plan 2 in 2026?
The Plan 2 threshold is £29,385 a year (£2,449 a month). You repay 9% of everything you earn above that — nothing below it. Thresholds usually rise each April with average earnings growth.
How much student loan comes out of a £50,000 salary?
For a Plan 2 borrower on £50,000, the deduction is 9% of £20,615 (the amount above £29,385) — about £155 a month or £1,855 a year. Plan 1 borrowers pay slightly more (£173) because their threshold is £26,900.
Does a student loan affect my mortgage application?
Yes — lenders treat the student loan deduction as a reduction in your take-home pay when assessing affordability, so it shrinks your borrowing capacity slightly. Because the deduction is 9% of only the slice above the threshold, the effect is smaller than most people expect. See our UK mortgage affordability guide.
Is it worth paying off my student loan early?
For most Plan 2 borrowers, no: the interest rate is capped, repayments are capped at 9% above the threshold, and any balance is written off after 30 years. Voluntary overpayments only make sense if you expect to clear the full balance within the write-off window — most graduates never repay it all.