Student Loans

UK student loans are financial support for students in higher education in the UK. Any loans that an employee took out after August 1998 are repayable through their payroll. There are different types of student loans available in the UK.

admin By admin - 03.10.2023

Which Student Loan type depends on where and when the student studied...

Plan 1 — If they applied to Student Finance England or Wales and started your course before 01 Sep 2012. If they applied to Student Awards Agency Northern Ireland.

Plan 2 — If they applied to Student Finance England or Wales and started their course between 01 Sep 2012 and 31 Jul 2023

Plan 4 — If they applied to Student Awards Agency Scotland.

Plan 5 – If they applied to Student Finance England or Wales and started their course on or after 01/08/2023    **New**

Postgraduate - For students studying postgraduate courses


Each Student Loan type comes with it's own threshold for when the deductions will begin, currently they are...

Plan 1 — £22,015 annually (£1,834 a month or £423 a week)

Plan 2 — £27,295 annually (£2,274 a month or £524 a week)

Plan 4 — £27,660 annually (£2,305 a month or £532 a week)

Plan 5 -  £25,000 annually (£2,083 a month or £480 a week)   **New - Repayments not began yet**

Postgraduate loans — £21,000 annually (£1,750 a month or £403 a week)

The new repayment plan, called Plan 5, is being introduced for students starting undergraduate and Advanced Learner Loan courses on or after 1st August 2023. Those with these new student loans won’t be expected to make repayments to their plan 5 student loan until April 2026 at the earliest, even if they leave their course early.

The employee can check which repayment plan they’re on by signing in to their online repayment account and downloading their ‘active plan type letter’. Then they can check which Plan Type they're on with Payroll. If it’s different from the plan in their letter, then the payroll details can be updated.  If you have a new joiner, who advise that they have a Student Loan to repay, but who don't know which Plan Type it is, then you can set them up as Plan Type 1 (the default Plan Type), then HMRC will advise of the correct Plan Type to use, once the employees first pay has been submitted to HMRC.

The amount the employee pays back depends on the type of loan they have and how much they earn. Employees repay 9% of the amount they earn over the threshold for Plan 1, 2, 4 and 5 (when repayments start). Employees repay 6% of the amount they earn over the threshold for Postgraduate loan.


They’re on Plan 4 and have an income of £30,000 a year, meaning they get paid £2,500 a month.

£2,500 - £2,305 (their income minus the Plan 4 threshold) = £195

9% of £195 is £17.55

This means they’ll pay £17 each month (you always round down to the nearest £ for Student Loan deductions).


The interest rate on Student Loans varies depending on the type of loan and changes regularly.  You can find out the latest Student Loan interest rates here

If the employee has more than one employment, then each employment will be treated seperatley.  Meaning they need to go over the Student Loan threshold for their Plan Type for each employment, before deductions will be made.

Student Loans are a crucial support to allow for further education and it's important that Students know when and how this will be repaid.

We hope this gives you a bit of an insight into Student Loans and how they operate, if you need  further help, get in touch:


All the best

Hayley & Lauren

Chanonry Payroll Solutions Ltd

For further guidance:


Link to where employees can log into their Student Loan Account:

Log in

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