Saturday, 30 May 2026
Student Loans
How the UK student loan system works — Plan 5 repayments, maintenance loan, what you actually owe and when you start paying it back.
11 articles
student loans
Getting student finance for a second degree is restricted by the 'previous study' rule, which generally reduces or removes funding if you already hold an equivalent qualification. But there are exceptions for certain subjects and personal circumstances.
student loans
If your only income is a part-time job paying below the repayment threshold, you won't make any student loan repayments. Repayments are based on annual earnings over £25,000 on Plan 5, and most part-time work falls below that.
isas
Because ISA interest is tax-free, it doesn't count as taxable income — and student loan repayments are based only on taxable earnings. So money you earn inside an ISA never raises your repayments, making ISAs a tidy option for graduates saving on the side.
student loans
Your UK student loan does not show up on your credit report and has no direct effect on your credit score. Lenders can't even see it. The one place it matters is a mortgage application, where your monthly repayment counts as a regular outgoing.
student loans
For 2026, maintenance loans range from around £4,000 to £14,135 a year depending on where you live and study and your household income. Students living away from home in London get the most; those living with parents get the least.
student loans
Plan 2 and Plan 5 are the two main undergraduate loan types in England. Plan 5 has a lower repayment threshold of £25,000 but charges cheaper RPI-only interest and runs for 40 years. Plan 2 has a higher threshold but pricier interest.
student loans
Plan 5 repayments started in April 2026 for anyone who began an undergraduate course in England from September 2023. You repay 9% of everything you earn above £25,000 a year, and interest is charged at RPI only with no added premium.
student loans
For most graduates, overpaying a student loan is a mistake. Because repayments depend on income and the balance is written off after decades, only high earners certain to repay the whole loan benefit from clearing it early.
student loans
Student loan interest for 2026 is based on RPI inflation, set at 3.2% for Plan 5. While the rate sounds important, what you repay each month depends on your income, not the interest, so for most graduates the rate is almost irrelevant.
student loans
If you drop out of university you still have to repay any student loan you've already received, but only once you earn above the repayment threshold. You won't be charged the full course cost — only what was actually paid out to you.
student loans
Your UK student loan is automatically written off after a fixed period — 40 years for Plan 5 and 30 years for Plan 2 — regardless of how much is left. Most graduates never repay the full amount before this happens.