Student Loan Repayment Guide UK 2026/27

Student loan repayments in the UK are collected through your payslip as a percentage of earnings above a plan-specific threshold — not as a fixed monthly amount. In 2026/27, most graduates on Plan 2 repay 9% of earnings above £27,295 per year, collected automatically by HMRC via PAYE.

UK Student Loan Repayment Thresholds 2026/27

How Repayments Are Calculated

Repayments are 9% of the amount you earn above the threshold, not 9% of your whole salary. For example, on a £35,000 salary with Plan 2:

• Earnings above threshold: £35,000 − £27,295 = £7,705
• Annual repayment: £7,705 × 9% = £693
• Monthly deduction: approximately £58

If you have both an undergraduate and a postgraduate loan, both are collected simultaneously from the same payslip. The deductions are separate and each has its own threshold.

Should You Overpay Your Student Loan?

For most Plan 2 borrowers, overpaying is rarely financially beneficial. The interest rate on Plan 2 loans adjusts with inflation and earnings, and the loan is written off after 40 years regardless of the balance. If you are unlikely to repay the full balance within the write-off period, voluntary overpayments are essentially lost. The exception is Plan 1 borrowers, where lower interest and shorter write-off periods sometimes make overpayment worthwhile. Always check your current balance and projected repayment before overpaying.