Thinking of leveling up your career with a UK Bachelor’s degree but worried about how to manage the costs? You’re not alone. For many, the idea of going back to university—whether it’s to change careers, secure a promotion, or simply pursue a long-held passion—comes with a lot of questions. How will I pay for it? What do repayments look like? Will I be overwhelmed by student debt? But the truth is, understanding the ins and outs of Student Loan Repayments doesn’t have to be daunting. In this guide, we break down the different repayment plans and thresholds, showing you exactly what to expect and how to manage your payments—so you can focus on achieving your goals.
Understanding Your Student Loan Repayment Plan
When you take out a student loan in the UK, the repayment terms depend on your loan plan type. This can be a little confusing, especially if you’re a British citizen, EU settled or pre-settled resident, or a Ukrainian migrant who’s looking to improve their career prospects through education. This guide will walk you through the basics, helping you understand repayment plans, thresholds, and how much you might have to repay. If you want more detailed information, you can find everything directly from the UK government’s student finance website.
Student Loan Repayments Thresholds: What You Need to Know
Your repayments depend on your annual income and the plan type you’re on. The UK sets different thresholds based on your plan, which means you only start repaying when you earn above a certain amount.
| Plan Type | Yearly Threshold | Monthly Threshold | Weekly Threshold |
|---|---|---|---|
| Plan 1 | £24,990 | £2,082 | £480 |
| Plan 2 | £27,295 | £2,274 | £524 |
| Plan 4 | £31,395 | £2,616 | £603 |
| Plan 5 | £25,000 | £2,083 | £480 |
| Postgraduate Loan | £21,000 | £1,750 | £403 |
You’ll repay:
- 9% of your income above the threshold for Plans 1, 2, 4, and 5.
- 6% of your income above the threshold for a Postgraduate Loan.
Example Calculations
To make this clearer, let’s look at a few examples:
- Example 1: Plan 1
You earn £33,000 a year, which means your monthly income is £2,750. Since the threshold for Plan 1 is £2,082, you’ll pay 9% on the difference:
Calculation:
£2,750 – £2,082 = £668
9% of £668 = £60.12
Your monthly repayment will be £60. - Example 2: Plan 4
Your annual income is £36,000, or £3,000 per month. The threshold for Plan 4 is £2,616.
Calculation:
£3,000 – £2,616 = £384
9% of £384 = £34.56
You’ll repay £34 each month.
What If Your Income Changes?
If your income fluctuates throughout the year, you’ll need to pay whenever your income exceeds the monthly or weekly threshold for your plan. For example, if you receive a bonus or overtime, you might make repayments for those months. If your annual income ends up below the yearly threshold, you can request a refund at the end of the tax year.
Interest Rates: How Much Will You Pay?
Interest rates vary depending on your loan plan. Here’s a breakdown of the current rates:
- Plan 1: 4.3%
- Plan 2: 4.3% to 7.3% (varies by income)
- Plan 4: 4.3%
- Plan 5: 4.3%
- Postgraduate Loans: 7.3%
For those on Plan 2, your interest rate depends on your annual income once you’ve finished studying:
- £28,470 or less: 4.3%
- £28,471 to £51,245: 4.3% plus up to 3%
- £51,245 or more: 7.3%
Repaying Multiple Loans: What to Know
If you have multiple loan types, like a Postgraduate Loan and a Plan 2 loan, you’ll need to repay both, but not separately. Instead, you’ll repay 6% of your income above £21,000 for the Postgraduate Loan and 9% above the lower threshold of your other plan.
Example: Plan 2 + Postgraduate Loan
You earn £28,800 annually, or £2,400 per month.
- Postgraduate Loan calculation:
£2,400 – £1,750 = £650
6% of £650 = £39 - Plan 2 calculation:
£2,400 – £2,274 = £126
9% of £126 = £11
Your total monthly repayment is £50.
Self-Employed? Here’s What to Expect
If you’re self-employed, your repayments will be based on your annual income as reported in your tax return. The HMRC calculates how much you owe for the year. If you’ve already made payments from a salary, these will be deducted from your self-assessment.
Why This Matters for Your Career
For many professionals, getting a Bachelor’s degree is a step towards career growth and financial stability. Understanding how student loans work helps you plan better, especially when considering your monthly repayments. Plus, with the option to defer repayments until your income increases, it’s more manageable than you might think.
Ready to Take the Next Step?
If you’re ready to start your educational journey and secure a brighter future, our Student Advisors are here to help you every step of the way. We’ll guide you through the application process, help you understand Student Finance, and make sure you find the best learning options to fit your lifestyle.
Call us today at +44 208 133 3133 or fill out the form on our website to get started. For more details about Student Finance repayment plans, visit the official UK government website.
Check our webinar and submit your form if you would like to receive our free consultation and help with documents during the enrolment and exams.
