Your student loan, actually calculated

Repayments begin the April after you graduate or leave your course, but only once your income exceeds your plan’s threshold. For Plan 2 that is £29,385/year; Plan 5 is £25,000; Plan 1 is £26,900; Plan 4 (Scotland) is £33,795; Postgraduate is £21,000. If you earn below the threshold no repayments are due and the pause does not count against your write-off clock. Earnings from employment are deducted at source by your employer via PAYE.

You repay 9% of everything above your threshold (6% for Postgraduate loans) — nothing more, even if your balance is very large. On Plan 2 at £40,000 salary: 9% × (£40,000 − £29,385) = £955/year or roughly £80/month, deducted automatically by your employer. At £50,000: £1,854/year or £155/month. Income from multiple jobs is combined; if you are self-employed you report via Self Assessment.

Write-off dates: Plan 1 — 25 years; Plan 2 and Plan 4 — 30 years; Plan 5 — 40 years; Postgraduate — 30 years. Cancellation happens automatically and is not taxable income. The OBR estimated (2021) that around 50% of Plan 2 graduates would never fully repay — for those borrowers the loan functions closer to a graduate tax than a conventional debt, capped by the write-off.

Plan 2: RPI + 0–3% sliding scale (RPI only below £29,385; RPI+3% above £52,884; sliding in between). Plan 5: RPI only — no surcharge. Plan 1 & Plan 4: the lower of RPI or Bank Rate + 1%. Currently Bank Rate is 4.25%, so the cap is 5.25%; RPI is lower, so Plan 1/4 interest follows RPI. Postgraduate: RPI + 3% always. RPI is measured each March and applied from the following September.

For most Plan 2 and Plan 5 borrowers the answer is no. If your projection shows write-off before full repayment, every voluntary pound sent to the Student Loans Company is money you would never have been required to repay anyway — you are effectively giving money to the government. For Plan 1 borrowers with high, stable incomes who are certain to repay in full, overpaying saves interest. Use the scenario comparison tool to model your specific situation before making any voluntary payments.

Plan 1: pre-2012 England/Wales students and most Scottish/NI borrowers. Lowest interest (capped), shortest write-off. Plan 2: England/Wales 2012– 2023, income-linked interest surcharge, 30-year write-off. Plan 4: Scotland, same interest as Plan 1 but 30-year write-off. Plan 5: England/Wales from 2023, RPI-only interest (no surcharge) but 40-year write-off and lower threshold — graduates pay for longer but without the income surcharge. Postgraduate: covers Masters and Doctoral loans for all UK nations; always RPI+3%.

If your income-contingent repayment is less than interest accruing that year, the unpaid interest is added to your balance. On Plan 2 with a £50,000 balance and £30,000 salary: interest might be ~£2,500/year but your repayment only ~£72 — so the balance grows by ~£2,428. This is normal for early careers. As your salary rises, repayments eventually exceed interest and the balance falls. Because of the write-off clause, a growing balance is not automatically a financial problem — use the calculator to see when (and whether) your balance peaks and turns.

Most calculators ask you to type in an RPI assumption (e.g., 3%) and hold it constant for 30 years. This calculator instead derives forward RPI year-by-year from the Bank of England’s gilt breakeven curve — the spread between nominal gilts and inflation-linked gilts at each maturity — reflecting actual market expectations rather than an arbitrary fixed number. Salary growth is anchored to ONS ASHE median earnings by industry section, with mean-reversion to the OBR’s long-run real wage forecast. Future repayments are discounted at the nominal gilt spot curve to show present value — the same IFS methodology used to value the student loan book on the public balance sheet.