Student Loan Repayment Threshold 2026/27: All 5 Plans

By Eternity Accountants Editorial Team · Reviewed by Shamayun Chowdhury, Senior Accountant · Published: 8 November 2026 · Last reviewed: November 2026 · Applies to the 2026/27 tax year

Student loans and repayment do not behave like a credit card or bank loan. You owe nothing month to month until your pay crosses a set line, and after that only a small share of the income above it is collected. That level, the student loan repayment threshold, depends on which plan you are on, and it changes most years.

This guide sets out every 2026/27 threshold, shows what you would actually repay at different salaries, explains how to find your plan and covers the Plan 2 freeze due from April 2027.

Student Loan Repayment Threshold 2026/27 for Every Plan

HMRC’s payroll specification for collecting student loans from 6 April 2026 confirms these annual figures. The monthly and weekly amounts are the annual threshold divided by 12 and 52, shown here rounded down to the pound.

For comparison, the 2025/26 student loan repayment threshold was £26,065 for Plan 1, £28,470 for Plan 2 and £32,745 for Plan 4, according to the Low Incomes Tax Reform Group. Plan 5 had no repayments before April 2026.

What counts as income

Your earnings are compared with the threshold before Income Tax, National Insurance or ordinary pension contributions come off. That means a salary sacrifice pension, which reduces your gross pay, can also reduce your student loan repayments.

How Much Will You Repay Above the Student Loan Repayment Threshold?

Because repayments are a percentage of income above the student loan repayment threshold, two people with the same salary can pay very different amounts depending on their plan. Here is the yearly repayment at three salary levels in 2026/27:

Graduates holding an undergraduate loan and a Postgraduate Loan repay the two side by side, so the figures stack. A Plan 2 graduate on £40,000 with a Postgraduate Loan would repay about £2,095 a year in total.

Plan 1 vs Plan 2: why the plan matters

The gap between the two most common student loan repayment plans is £2,485 of income. So once you earn above £29,385, a Plan 1 borrower repays £223.65 a year more than someone on student loan Plan 2 with the same salary. Below that level, Plan 2 borrowers may repay nothing at all while Plan 1 borrowers are already paying.

Which Student Loan Plan Am I On?

You cannot choose your plan. It depends on where you applied for student finance and when your course started, as set out in GOV.UK’s guide to which repayment plan you are on:

The quickest check is your Student Loans Company online account, where you can download a letter confirming your plan type. Spot a different plan on your payslip? Hand that letter to payroll and ask them to update their records.

How the Student Loan Repayment Threshold Works Through Payroll

Every payday, your employer compares that period’s pay with the weekly or monthly figure for your plan. Anything above it is charged at 9% (6% for a Postgraduate Loan), rounded down to the pound, and paid over to HMRC alongside your tax.

• Each pay period stands alone: a bonus month can trigger a deduction even if your annual pay is below the student loan repayment threshold.
• Two jobs: each employer applies the threshold separately, so you may repay nothing on either even if your combined pay is above it.
• One plan at a time: payroll collects only one of Plans 1, 2, 4 or 5, plus any Postgraduate Loan alongside it.

If your total income for the year ends up below your threshold but money was still taken, you can ask the Student Loans Company for a refund of the overpayment.

When repayments start

Repayment on student loans normally begins in the April after you finish or leave your course. Someone who graduated in June 2025 would see deductions from April 2026 if their pay passes the student loan repayment threshold. Leaving a course early starts the clock in the same way.

Nearly paid off?

Payroll deductions can overshoot in the final months of a loan. If your balance is small, the Student Loans Company may let you switch to Direct Debit so you stop exactly at zero, rather than claiming a refund afterwards.

Student Loan Repayments for the Self-Employed

Without an employer to collect repayments, self-employed borrowers settle them through their Self Assessment return, paid together with their tax bill. The student loan repayment threshold applies to your total income for the year, not each month.

The Self Assessment calculation also includes unearned income, such as rent, dividends or savings interest, once it is over £2,000. Once you pass £2,000, all of it counts, not just the excess. Repayments already taken through any PAYE job are deducted from the Self Assessment figure, so you do not pay twice.

Living abroad

If you move overseas for more than three months, payroll and Self Assessment no longer collect repayments. You must tell the Student Loans Company, which sets a threshold based on the country where you live and collects payments directly.

Can You Legally Reduce What You Repay?

You cannot change your student loan repayment threshold, but you can make sure you are not paying more than you should:

• Salary sacrifice: pension contributions made through salary sacrifice lower the gross pay measured against the threshold.
• Business expenses: for the self-employed, repayments are based on taxable profit, so claiming every allowable expense matters.
• Refund claims: if your income for a whole year stayed below the student loan repayment threshold but deductions were taken, ask for the money back.
• Correct plan code: make sure payroll is using your actual plan and not a lower threshold.

Whether paying off a loan early makes sense depends on your salary, balance and plan, because many balances are written off before they are cleared. Speak to a financial adviser before making large voluntary payments..

Is the Plan 2 Student Loan Repayment Threshold Frozen?

Yes, from 2027/28. Payroll body the CIPP reported that the November 2025 Budget froze the Plan 2 threshold at £29,385 for the three tax years from 2027/28 to 2029/30. As wages rise, more of your income will fall above the line.

When Is Your Student Loan Written Off?

Any balance left at the end of a fixed period is cancelled, as shown on GOV.UK’s write-off guidance. The clock starts in the April your first repayment was due.

What Mistakes Cost Graduates Money?

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% above the threshold, or 6% for a Postgraduate Loan.

What is the Plan 2 student loan threshold?

The Plan 2 threshold is £29,385 a year in 2026/27, about £2,448 a month. It is due to stay at that level until April 2030.

Do I repay my student loan if I earn below the threshold?

No. If your income is below your plan’s threshold, nothing is taken. If a one-off high-paying month triggered a deduction, you can claim it back once your annual income is confirmed.

Is the student loan threshold before or after tax?

Before tax. The threshold is compared with your gross pay before Income Tax and National Insurance, though salary sacrifice pension contributions lower the gross pay that is measured.

Can I have more than one student loan plan?

Yes. You can have more than one plan, for example Plan 2 and a Postgraduate Loan, and you repay both at the same time. Payroll collects only one undergraduate plan at a time.

Does paying extra reduce my monthly deductions?

No. Extra payments made straight to the Student Loans Company clear the balance sooner, but payroll and Self Assessment keep collecting the same amount.

Final Verdict: Student Loan Repayment Threshold

The student loan repayment threshold for 2026/27 ranges from £21,000 for Postgraduate Loans to £33,795 for Plan 4, with Plan 2 at £29,385. You repay 9% of income above your line, or 6% for a Postgraduate Loan. Check your plan with the Student Loans Company, make sure payroll uses it, and plan for the Plan 2 freeze from April 2027.