---
title: "Student Loan Repayments UK 2026/27: A Guide to Plans & Thresholds"
description: Understanding your student loan repayment obligations is a critical aspect of financial management. For the tax year starting 6 April 2026, it is essential to know which repayment plan you are on, the relevant income thresholds, and how your repayments…
url: "https://www.accountingfirms.co.uk/knowledge-bank/student-loan-repayments-uk/"
updated: "2026-08-12"
category: Self Employed Tax
---

# Student Loan Repayments UK 2026/27: A Guide to Plans & Thresholds

Understanding your student loan repayment obligations is a critical aspect of financial management. For the tax year starting 6 April 2026, it is essential to know which repayment plan you are on, the relevant income thresholds, and how your repayments are collected. HMRC administers the collection of income-contingent student loans in the UK through the PAYE and Self Assessment systems.

## **Which Student Loan Plan Am I On?**

The UK operates several different student loan plans, and the one you are on depends on where and when you studied. Each plan has a different earnings threshold, so identifying your correct plan type is the first step.

| Plan Type | Applies to Students Who... |
| --- | --- |
| **Plan 1** | Started an undergraduate course before 1 September 2012 (England and Wales). |
| **Plan 2** | Started an undergraduate course on or after 1 September 2012 (England and Wales). |
| **Plan 4** | Are Scottish students. |
| **Plan 5** | Started an undergraduate course on or after 1 August 2023 (England). |
| **Postgraduate Loan (PGL)** | Took out a Master's or Doctoral loan in England or Wales. |

It is possible for a borrower to be repaying more than one type of loan at the same time, for example, a Plan 2 loan and a Postgraduate Loan.

## **Student Loan Repayment Thresholds for 2026/27**

You only start making repayments once your income exceeds the annual threshold for your specific loan plan. Repayments are calculated as a percentage of your income *above* that threshold.

The repayment rates and annual thresholds for the [2026/27 tax](https://www.accountingfirms.co.uk/blog/good-timing-can-save-a-lot-of-tax/) year are as follows:

| Loan Type | Annual Repayment Threshold | Repayment Rate |
| --- | --- | --- |
| **Plan 1** | £26,900 | 9% |
| **Plan 2** | £29,385 | 9% |
| **Plan 4** | £33,795 | 9% |
| **Plan 5** | £25,000 | 9% |
| **Postgraduate Loan (PGL)** | £21,000 | 6% |

The calculation is straightforward: you [pay the specified percentage on any income](https://www.accountingfirms.co.uk/knowledge-bank/how-is-income-tax-collected-through-pay-as-you-earn-paye/) earned above the threshold for your plan type.

## **How Repayments are Collected by HMRC**

HMRC collects [student loan repayments](https://www.accountingfirms.co.uk/student-loan-repayment-calculator/) on behalf of the Student Loans Company (SLC). The method of collection depends on your employment status.

### **For Employees (PAYE)**

If you are an employee, your employer will automatically deduct student [loan repayments](https://www.accountingfirms.co.uk/blog/should-i-pay-off-my-student-loan/) from your salary through the Pay As You Earn (PAYE) system. This process begins once HMRC sends your employer a 'start notice' (form SL1 for student loans or PGL1 for postgraduate loans).

- Deductions are calculated on your gross [pay before tax](https://www.accountingfirms.co.uk/blog/how-to-pay-self-assessment-tax/).
- The amount is calculated on a per-pay-period basis. If your income in a particular week or month is below the pro-rata threshold, no deduction will be made.
- The deductions are shown on your payslip.

### **For the Self-Employed (Self Assessment)**

If you are self-employed or have other sources of income, you must declare your student loan status on your annual [Self Assessment tax return](https://www.accountingfirms.co.uk/knowledge-bank/what-should-i-do-if-ive-stopped-being-self-employed/). You will be asked to confirm your plan type and report any repayments already made through employment.

- The repayment amount is calculated based on your total income for the [tax year](https://www.accountingfirms.co.uk/knowledge-bank/basis-period-reform-a-practical-guide/), which can include both earned and unearned income (if unearned income exceeds £2,000).
- The student loan repayment is then paid to HMRC along with your [income tax](https://www.accountingfirms.co.uk/blog/hmrc-payment-niers/) and National Insurance liabilities.

## **When Do Student Loan Repayments Stop?**

Repayments will cease under several circumstances.

1. **The Loan is Fully Repaid:** Once your balance is cleared, repayments stop. To prevent over-repayment, the SLC offers a Direct Debit scheme for borrowers who are in the final 23 months of their loan term.
2. **The Loan is Written Off:** Depending on your loan plan and when you took it out, the outstanding balance will be cancelled after a set period (e.g., 25 or 30 years) or if you become permanently unfit to work.
3. **The Borrower Dies:** The loan is cancelled upon the death of the borrower. You must provide the SLC with evidence, such as a death certificate.

If you do overpay, the SLC will automatically try to refund you once they have received the final repayment information from HMRC.

 

*For detailed legislative guidance, you may wish to consult The Education (Student Loans) (Repayment) Regulations 2009. For operational guidance, review the HMRC Collection of Student Loans Manual (CSLM), particularly sections CSLM2010 for an overview of loan types and CSLM16030 for calculation methods.*

## References

1. [Collection of Student Loans Manual - CSLM2010 - About CSL: overview of student loans: student loans at 1](https://www.gov.uk/hmrc-internal-manuals/collection-of-student-loans-manual/cslm2010#:~:text=by%20third%20partiesThe%20borrower%20can,Loans%20CompanyThere%20is%20an%20annual&text=by%20third%20partiesThe%20borrower%20can,to%20the%20Student&text=apply%20for%20deferment,Loans%20CompanyThere%20is%20an%20annual&text=apply%20for%20deferment,to%20the%20Student)
2. [Collection of Student Loans Manual - CSLM2010 - About CSL: overview of student loans: student loans at 1](https://www.gov.uk/hmrc-internal-manuals/collection-of-student-loans-manual/cslm2010#:~:text=loans%20replaced%20the%20fixed%20%2D,to%20either%20switch%20from%20plan&text=loans%20replaced%20the%20fixed%20%2D,sent%20an%20SL1&text=term%20repayment%20loans%2C,to%20either%20switch%20from%20plan&text=term%20repayment%20loans%2C,sent%20an%20SL1)
3. [Collection of Student Loans Manual - CSLM2010 - About CSL: overview of student loans: student loans at 1](https://www.gov.uk/hmrc-internal-manuals/collection-of-student-loans-manual/cslm2010#:~:text=1%20to%20plan%204%20or,Any%20enquiries%20regarding%20the%20scheme&text=1%20to%20plan%204%20or,now%20been%20withdrawn&text=to%20start%20taking,Any%20enquiries%20regarding%20the%20scheme&text=to%20start%20taking,now%20been%20withdrawn)
4. [Collection of Student Loans Manual - CSLM8575 - Compliance: borrowers compliance: settlement procedures at 1](https://www.gov.uk/hmrc-internal-manuals/collection-of-student-loans-manual/cslm8575#:~:text=Collection%20of%20Student%20Loans%20Manual,the%20settlement%20in%20the%20same&text=Collection%20of%20Student%20Loans%20Manual,Loan%20repayments%20in&text=CSLM8575%20%2D%20Compliance,the%20settlement%20in%20the%20same&text=CSLM8575%20%2D%20Compliance,Loan%20repayments%20in)
5. [Collection of Student Loans Manual - CSLM9001 - Compliance: employer compliance: introduction at 1](https://www.gov.uk/hmrc-internal-manuals/collection-of-student-loans-manual/cslm9001#:~:text=loans%20were%20introduced%20from%20April,%20Next%20page&text=loans%20were%20introduced%20from%20April,HMRC%20gave%20a&text=2019,%20Next%20page&text=2019,HMRC%20gave%20a)