Understanding when you start repaying your student loan is crucial for budgeting after graduation. In this comprehensive guide, we'll break down the exact thresholds for each repayment plan and show you how much you'll actually pay.
You only start repaying when you earn above your plan's threshold. For 2024/25:
The repayment threshold is the minimum annual salary you need to earn before you start making student loan repayments. Think of it as a "tax-free allowance" for your student loan – you don't pay anything on the first portion of your earnings.
This is fundamentally different from other types of loans. With a personal loan or credit card, you pay regardless of your income. With student loans, if you're not earning enough, you simply don't pay. There's no penalty, no default, no impact on your credit score.
| Repayment Plan | Annual Threshold | Monthly Threshold | Weekly Threshold |
|---|---|---|---|
| Plan 1 | £24,990 | £2,082.50 | £480.58 |
| Plan 2 | £27,295 | £2,274.58 | £524.90 |
| Plan 4 | £31,395 | £2,616.25 | £603.75 |
Your repayment plan depends on when and where you started university:
Use our free calculator to see exactly how much you'll pay each month based on your salary
Calculate Now →Once you earn above your threshold, you repay 9% of everything above that threshold. This is the same rate for all three plans.
Here's a practical example for someone on Plan 2:
Salary: £30,000 per year
Plan 2 threshold: £27,295
Income above threshold: £30,000 - £27,295 = £2,705
Annual repayment: £2,705 × 9% = £243.45
Monthly repayment: £243.45 ÷ 12 = £20.29
As you can see, at £30,000, you'd only pay about £20 per month. This is much less than many graduates expect!
| Annual Salary | Monthly Repayment | Annual Repayment |
|---|---|---|
| £25,000 | £0 | £0 |
| £28,000 | £5.29 | £63.45 |
| £30,000 | £20.29 | £243.45 |
| £35,000 | £57.79 | £693.45 |
| £40,000 | £95.29 | £1,143.45 |
| £50,000 | £170.29 | £2,043.45 |
Yes, thresholds can change annually, though they don't always increase. The government reviews them each year and announces changes in the autumn.
Historically, thresholds have generally increased in line with inflation or average earnings, but this isn't guaranteed. For example, the Plan 2 threshold was frozen at £27,295 for several years before recent changes.
⚠️ Important: Always check the current year's thresholds on the official gov.uk website or the Student Loans Company. Our calculator uses the latest 2024/25 thresholds.
Your repayments automatically adjust to your income. This happens in two ways:
Your employer deducts student loan repayments from your salary each month, just like income tax. If your salary changes, your repayments change automatically. There's nothing you need to do.
You'll pay through your Self Assessment tax return. You calculate and pay your student loan repayments annually based on your profits. If you have a bad year and earn below the threshold, you simply don't pay anything.
Your repayments automatically stop when you're unemployed or earning below the threshold. There's no penalty for this – it's built into how the system works. You won't be chased for payments and it won't affect your credit score.
If you have more than one job, each employer will deduct student loan repayments if you earn over the threshold with that specific employer. This can sometimes result in overpaying.
For example, if you earn £20,000 from two different jobs (£40,000 total), each employer would see you earning above the Plan 2 threshold and deduct repayments, even though individually each job pays below the threshold.
If this happens, you can claim a refund from the Student Loans Company at the end of the tax year.
The threshold applies to your gross income (before tax). So if you earn £30,000 per year before tax, that's the figure used to calculate your repayments.
Generally, all employment income and self-employed profits count. This includes:
Investment income, rental income (unless you're self-employed as a landlord), and most benefits don't count toward the threshold.
Yes, you can make voluntary repayments at any time by contacting the Student Loans Company. However, most financial advisors don't recommend this because:
When thresholds increase, it's good news for borrowers – you'll pay less each month or might stop paying altogether if your salary hasn't kept pace with the threshold increase.
For example, when the Plan 1 threshold increased from £20,195 to £22,015 in April 2023, someone earning £25,000 saw their monthly repayment drop from £36.05 to £22.36 – a saving of almost £165 per year.
Use our calculator to model different scenarios and plan your finances
Try the Calculator →Understanding these thresholds is essential for budgeting after graduation. While the total loan amount might seem daunting, the actual monthly repayments for most graduates are quite manageable – often less than a gym membership!
For official information about student loan repayments, contact: