With student loan Plan 2 vs Plan 5, both plans take 9% of your income above a threshold, but Plan 5 starts earlier and lasts longer. In 2026/27, Plan 2 repayments start above £29,385 and Plan 5 above £25,000.
Plan 2 vs Plan 5 at a glance
| Plan 2 | Plan 5 | |
|---|---|---|
| Who | England and Wales, courses started Sept 2012 – July 2023 | England, courses started from 1 Aug 2023 |
| Repayment threshold | £29,385 | £25,000 |
| Repayment rate | 9% above threshold | 9% above threshold |
| Interest | RPI plus up to 3%, depending on income | RPI only |
| Written off after | 30 years | 40 years |
Monthly repayments by salary
| Salary | Plan 2 per month | Plan 5 per month |
|---|---|---|
| £25,000 | £0 | £0 |
| £30,000 | £5 | £38 |
| £35,000 | £42 | £75 |
| £40,000 | £80 | £113 |
| £50,000 | £155 | £188 |
| £60,000 | £230 | £263 |
Which plan costs more overall?
Plan 5 charges less interest, but its lower threshold and 40-year term mean most graduates will repay for longer. Many Plan 2 borrowers never clear their balance before it is written off; far more Plan 5 borrowers are expected to repay in full over their careers.
Should you overpay?
Only if you are confident you will clear the loan before it is written off. Otherwise, extra payments reduce a debt that would have been cancelled anyway. Your pension or an ISA may be a better use of spare cash.
How repayments are collected
Employees repay through PAYE: your employer deducts 9% of pay above the threshold each pay period and sends it to HMRC. Self-employed graduates repay through Self Assessment. Repayments stop automatically if your income drops below the threshold.
A worked example
On a £35,000 salary, a Plan 2 borrower repays 9% of £5,615, about £505 a year. A Plan 5 borrower on the same salary repays 9% of £10,000, about £900 a year.
Living abroad
If you move overseas, you must tell the Student Loans Company. Repayments are then based on fixed thresholds for the country you live in, and you pay the SLC directly instead of through PAYE.
Student loans and mortgages
Student loan repayments do not appear on your credit file, but lenders take the monthly deduction into account when working out how much you can borrow.
See repayments for every plan in our student loan repayment guide or add a loan in the UK take-home pay calculator.
Student loan Plan 2 vs Plan 5: how to check your plan and your payslip
Many graduates are not sure which plan they are on, and the wrong plan on your payslip means the wrong deductions. These steps help you check.
- Look at your course start date. Courses in England started between September 2012 and July 2023 are usually Plan 2; courses started from 1 August 2023 are Plan 5.
- Log in to your Student Loans Company account. It shows your plan type, balance and the interest being added.
- Check your payslip. The student loan line should match the table above: for example about £155 a month on a £50,000 salary under Plan 2, or about £188 under Plan 5.
- Tell your employer if it is wrong. Payroll uses the plan type HMRC gives it, so a wrong plan should be raised with both your employer and the SLC.
What student loan Plan 2 vs Plan 5 means over a year
At £50,000, the student loan Plan 2 vs Plan 5 gap is about £33 a month, or roughly £400 a year. At £30,000, a Plan 5 borrower repays about £38 a month while a Plan 2 borrower repays about £5, because the Plan 2 threshold is higher.
Common mistakes
- Treating the balance like a normal debt: repayments depend on income, not on what you owe.
- Overpaying on Plan 2 when the loan is likely to be written off after 30 years.
- Forgetting that a postgraduate loan is repaid separately, on top of an undergraduate plan.
The official thresholds and rules for each plan are on gov.uk. When comparing student loan Plan 2 vs Plan 5 for a sibling or a future student, remember that new English students are placed on Plan 5 automatically: there is no choice between the two.
Frequently asked questions
Who is on Plan 5?
Students from England who started an undergraduate course on or after 1 August 2023.
What is the Plan 5 threshold?
£25,000 a year in 2026/27.
When is a Plan 5 loan written off?
After 40 years, compared with 30 years for Plan 2.
Estimates for information only, not tax advice.
