Student loans: new repayment thresholds for 2027–2028

On 12 November 2026 the government announced the income thresholds for student loan repayments for the period from 6 April 2027 to 5 April 2028. The repayment threshold — the yearly income above which deductions start — decides how much you pay, because you only repay a share of the income above the threshold. The figures differ by loan type, and this year they move in different directions.

What exactly was announced for 2027–2028?

In short: one threshold goes up, two are frozen. Under the announcement:

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• Plan 5 (loans for students who began courses in England from the 2023 academic year): the threshold rises to £26,025 from 6 April 2027 (currently £25,000).
• Plan 2 (loans for students who started from autumn 2012): the threshold stays at £29,385. The higher interest rate threshold is also frozen, at £52,885.
• Plan 3, the Postgraduate Loan (for a master's or doctorate): the threshold stays at £21,000.

What does 'the threshold is frozen' mean?

It is a quiet rise in repayments. While the threshold stays put and wages rise, a larger share of income sits 'above the threshold', so deductions creep up even if the rate is unchanged. Freezing Plan 2 and the Postgraduate Loan therefore means those borrowers will repay slightly more over the year. The Plan 5 rise to £26,025 works the other way: £1,025 more income is shielded from deductions, so the repayment falls a little.

How much is taken, and from what?

Repayments depend on income, not on the size of the debt: you repay a share of earnings above your plan's threshold. Under current rules that is:

• 9% of income over the threshold for Plans 1, 2, 4 and 5;
• 6% of income over the threshold for a Postgraduate Loan.

The current yearly thresholds (until April 2027) are: Plan 1 — £26,900, Plan 2 — £29,385, Plan 4 — £33,795 (Scotland), Plan 5 — £25,000, Postgraduate Loan — £21,000. As a monthly figure, the Plan 2 threshold is £2,448, Plan 5 is £2,083 and the Postgraduate Loan is £1,750: a deduction is triggered if your monthly income (for example, with a bonus) goes over that line.

Who does this affect most?

Mainly recent graduates of English universities: most current students are on Plan 5, and it is Plan 5's threshold that rises. Plan 2 borrowers (roughly the 2012–2022 cohorts) and those with a Postgraduate Loan get no rise. Remember that repayments are taken automatically from your salary through your employer once income passes the threshold; if you earned less than the yearly threshold over the year, you can claim a refund at the end of the tax year.

What should you do now?

Nothing special — the new thresholds take effect by themselves from 6 April 2027. But it helps to know your plan (it depends on the year and place of study), to check that your employer has the right plan, and to remember the right to a refund if your income for the year was below the threshold.