Calculator · Plan 2
Plan 2 Student Loan Calculator: Your Repayments to Write-Off
Written by Zubair Arshed FIA, Chartered Actuary
Fellow of the Institute and Faculty of Actuaries
Actuarial Post Life and Health Actuary of the Year 2024
This Plan 2 student loan calculator projects your balance, repayments and write-off outcome for the 2012 to 2023 England and Wales cohort, using forward inflation priced from the gilt market and ONS salary data for your industry.
Plan 2 is the plan where projection matters most. The income-linked interest surcharge, the frozen threshold and the 30-year write-off interact in ways that make intuition unreliable: a growing balance can be harmless, and an innocent-looking overpayment can be pure loss.
Repayment threshold
£29,385 (frozen until at least April 2030)
Interest rate
RPI + 0–3%, rising with income
Written off after
30 years
Who is on it
England/Wales, September 2012 to July 2023
2025-26 tax year values. Thresholds change each April; verify at gov.uk.
How is a Plan 2 repayment calculated?
Annual repayment = 9% × (salary − £29,385)
At £40,000 salary:
9% × £10,615 = £955/year (roughly £80/month)
Interest at £40,000 = RPI + 1.36% surcharge = 4.56% with RPI at 3.2%
On a £50,000 balance: £2,280/year of interest vs £955 repaid
At this salary the balance is still growing by about £1,325 a year. That is expected Plan 2 behaviour, not a crisis: what matters is whether the projection shows full repayment or write-off at year 30.
Will my Plan 2 loan be written off?
A large share of Plan 2 borrowers will never repay in full, and their remaining balance is cancelled tax-free at 30 years. For those borrowers the loan behaves like a 9% graduate tax with an end date, and the headline balance is close to irrelevant. Whether you are in that group depends on your balance, your salary path and future RPI, which is exactly what this calculator projects.
The threshold freeze makes the arithmetic worse each year: a frozen £29,385 threshold against rising wages pulls more of your salary into the 9% band. Our threshold freeze guide quantifies the cost, and the calculator’s toggle lets you compare frozen and inflation-linked scenarios side by side.
Why use this Plan 2 student loan calculator?
Plan 2 projections are dominated by two assumptions: future RPI (which drives the interest surcharge) and your salary path (which drives both repayments and the surcharge rate). This calculator takes RPI from the gilt breakeven curve for each future year and anchors salary growth to ONS ASHE data for your industry, rather than asking you to guess a single number for three decades. The methodology page sets out every assumption.
Run your Plan 2 projection
The calculator infers your plan from where and when you studied, then projects every year to payoff or write-off. Free, no account needed.
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