Repayment threshold changes

From 6 April 2018 the repayment thresholds for student loans is changing. The repayment threshold is how much you can earn before you need to repay your student loan.

This section covers:

Repayment threshold changes

Plan 2

You’re on Plan 2 if you’re

  • an English or Welsh student who started your undergraduate course on or after 1 September 2012.

The repayment threshold for Plan 2 student loans will be £25,000 a year, £2,083 a month or £480 a week.

If your income is £25,000 or higher, the amount you’ll repay will be approximately £30 less per month using the new repayment threshold.

The table below shows some examples:

Your annual income before taxHow much you repay per month nowHow much you’ll repay per month from 6 April
£21,000 £0 £0
£23,500 £18 £0
£25,000 £29 £0
£27,000 £45 £15
£30,000 £67 £37

Find out:

Plan 1

You’re on Plan 1 if you’re:

  • an English or Welsh student who started your undergraduate course before 1 September 2012
  • a Scottish or Northern Irish student

The repayment threshold for Plan 1 student loans will be £18,330 a year, £1,527 a month or £352 a week.

Find out more information on repaying a Plan 1 loan

Postgraduate Loan

(including Postgraduate Master’s and Postgraduate Doctoral)

Postgraduate Loans don’t come into repayment until 6 April 2019.

The repayment threshold will still be £21,000 a year, £1,750 a month or £404 a week. Postgraduate Loans will be repaid in addition to undergraduate Plan 1 or Plan 2 loans. Find out more information on repaying a Postgraduate Loan.

Mortgage Style Loans

From 1 September 2017 until 31 August 2018 the threshold for mortgage style loans will be £29,219.

Any queries on mortgage style loans should be addressed to the loan administrator.

What happens next

If you’re employed in the UK, your employer should automatically update your student loan deductions in line with the new repayment threshold.

If you’re self-employed, HMRC will calculate how much you owe for the year in line with the new repayment threshold.

What you need to do

Double check your April payslip to make sure your new repayment amount is correct. If you think your repayment amount is wrong, speak to your employer to get this changed.

Once you’ve spoken to your employer they’ll need to contact HMRC to discuss this.

Overseas

To take account of differences in living costs, the repayment threshold in a foreign country may not be the same as the UK. The repayment threshold is how much you can earn before you need to repay your student loan.

The way we work out your monthly repayment remains the same, meaning that your repayment will remain 9% of your income above the repayment threshold for the country you’re living in.

Plan 2

You’re on Plan 2 if you’re

  • an English or Welsh student who started your undergraduate course on or after 1 September 2012.

The table below shows some of the current repayment thresholds and what these will change to from 6 April 2018:

CountryCurrent earning thresholdNew earning threshold
Australia £25,000 £30,000
Canada £21,000 £25,000
Cyprus £16,800 £20,000
France £16,800 £25,000
Germany £16,800 £25,000
Ireland £16,800 £25,000
New Zealand £21,000 £25,000
Spain £16,800 £20,000
United States £21,000 £25,000

A list of repayment thresholds for all countries in the world is available.

Plan 1

You’re on Plan 1 if you’re:

  • an English or Welsh student who started your undergraduate course before 1 September 2012
  • a Scottish or Northern Irish student

The table below shows some of the current repayment thresholds and what these will change to from 6 April 2018:

CountryCurrent earning thresholdNew earning threshold
Australia £21,330 £21,995
Canada £17,775 £18,330
Cyprus £14,225 £14,670
France £14,225 £18,330
Germany £14,225 £18,330
Ireland £14,225 £18,330
New Zealand £17,775 £18,330
Spain £14,225 £14,670
United States £17,775 £18,330

A list of repayment thresholds for all countries in the world is available.