# What is the Plan 2 student loan repayment threshold?

> Quick answer · Last updated 23 June 2026

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## In short

Plan 2 loans (England/Wales undergraduates who started from September 2012) are repaid at 9% of income above the annual threshold. For 2026/27 the threshold is £29,385 — repayments start once your gross income exceeds that figure, and any outstanding balance is written off 30 years after the April you graduated.

Plan 2 applies to most English and Welsh students who started an undergraduate course on or after 1 September 2012. You repay through PAYE alongside Income Tax and National Insurance once earnings pass the threshold, which is updated each tax year and applies from 6 April.

For 2026/27 the Plan 2 threshold is £29,385 a year (£2,448 a month before tax). You pay 9% only on income above that level — not on your whole salary. Earning £39,385 means £900 a year in repayments (9% of £10,000). If income drops below the threshold, repayments stop automatically until it rises again.

Interest on Plan 2 loans is linked to inflation (RPI) plus up to 3% depending on income while studying and after. The balance can grow, but repayments depend on earnings, not the outstanding amount. After 30 years from the April after graduation, any remaining debt is cancelled regardless of how much you repaid.

Plan 2 is separate from Plan 1 (pre-2012), Plan 4 (Scotland) and Plan 5 (England from 2023 starters, with a lower threshold but longer write-off period). Check your plan on your payslip or HMRC Personal Tax Account. Extra voluntary repayments reduce the balance but may not be optimal if you are unlikely to clear the loan before write-off.

## Related

- [What is a maintenance loan?](https://moneyguide.org.uk/answers/what-is-maintenance-loan/)
- [Family & life events guide](https://moneyguide.org.uk/family-life/)

## Primary source

gov.uk/repaying-your-student-loan

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.