What is Plan 5 student loan?
Where a link is marked *, it is a partner link — we receive commission at no extra cost to you. Links without a * earn us nothing. How we make money.
In short: The English student loan plan for most undergraduate courses starting from September 2023. You repay 9% of income above £25,000 a year; any balance left after 40 years is written off.
Last reviewed:
Reviewed by Kaiser Khan
Plan 5 applies to new undergraduate students in England who started a course on or after 1 August 2023. It replaced Plan 2 for that cohort. You borrow tuition fee and maintenance loans as before, but the repayment terms differ from earlier plans.
Repayments start the April after you finish or leave your course, but only when your income goes over the £25,000 threshold (before tax). You pay 9% of anything above that — so at £30,000 you repay roughly £450 a year. If you earn below the threshold, you pay nothing.
Interest is fixed at the Retail Prices Index (RPI) rate for Plan 5 loans — there is no higher 'income-contingent' interest tier as on Plan 2. The loan is written off 40 years after the April you become liable to repay, or if you die or become permanently unfit to work.
Plan 5 is collected through PAYE alongside tax, so employers deduct it automatically. It is not like a commercial loan: many graduates will not clear the balance before write-off, and monthly payments depend on income, not the total borrowed.
Primary source: gov.uk/repaying-your-student-loan/what-you-pay
Part of our Family & care
This quick answer sits inside our wider family & care hub — with sub-guides, calculators and step-by-step explainers on the same topic.
Read the full family & care guide →