What this calculator does

Takes loan balance, plan type (Plan 1, 2, 4, or 5), income and expected annual income growth rate, and models annual repayments, interest accrual, and write-off date. Returns total repaid, total interest paid, and whether the loan is likely to be written off before full repayment.

The formula

Annual repayment = max(0, (income − threshold) × repayment_rate)

Each year simulation:
  1. Apply interest to opening balance: balance × (1 + rate)
  2. Deduct annual repayment
  3. Balance cannot go below zero
  4. Check if write-off year reached — if so, remaining balance is written off

Repayment thresholds and rates (2025/26)

Plan Threshold Repayment rate above threshold Write-off period
Plan 1 £24,990/yr 9% 25 years from first repayment / April after leaving study
Plan 2 £27,295/yr 9% 30 years from April following graduation
Plan 4 £31,395/yr 9% 30 years from the April after graduation
Plan 5 £25,000/yr 9% 40 years from the April after entering repayment

Interest rates (2025/26)

Plan Interest rate
Plan 1 RPI or Bank of England base rate + 1% (whichever is lower)
Plan 2 RPI to RPI + 3% (sliding scale based on income)
Plan 4 RPI or Bank Rate + 1% (whichever is lower)
Plan 5 RPI (no additional margin)

Assumptions

  • Income grows at the user-specified rate (default 3% per year).
  • Interest rates are held constant at current rates — in practice they are variable and reset annually.
  • Repayments are calculated on post-tax income; tax and National Insurance are not separately modelled.
  • Repayment thresholds are assumed to increase with RPI annually (Plan 2 thresholds are inflation-linked, though this can vary by government policy).

Data sources

Limitations

  • Interest rates are variable and reset annually — actual total repaid will differ from projections.
  • Income trajectory is a user assumption; career breaks, part-time working, or periods below the threshold are not modelled.
  • The Postgraduate Loan (PGL) is a separate plan with different terms and is not modelled here.
  • Scottish students on Plan 4 may have different terms in some years.

Worked example

Inputs: £45,000 balance, Plan 2, £30,000 starting income, 3% annual income growth, 2.5% interest rate.

Year 1:
  Repayment = (£30,000 − £27,295) × 9% = £243
  Interest  = £45,000 × 2.5% = £1,125
  New balance = £45,000 + £1,125 − £243 = £45,882

Year 5 (income ~£34,749 after 3%/yr growth):
  Repayment = (£34,749 − £27,295) × 9% = £671
  Balance ~£47,800 (still growing — income growth lags interest)

Balance peaks then declines as income rises above the growth rate.
In this scenario the loan is written off at year 30
with approximately £35,000 remaining unrepaid.

Changelog

Date Change
May 2026 Initial publication

Use the Student Loan Repayment Calculator →