Plan 2 Student Loan Repayment Calculator
Plan 2 applies to English and Welsh students who started university on or after 1 September 2012. It is the most common student loan plan for current graduates, and has some of the highest interest rates of any plan.
Student Loan Repayment Calculator
Enter your details below to see your projected repayments and outcome.
For students who started on or after 1 September 2012 in England and Wales - repay 9% above £28,470, written off after 30 years
UK average earnings growth is around 2–3% per year. Use 0% for a pessimistic scenario.
How Plan 2 Student Loan Repayments Work
Plan 2 was introduced for students starting courses in England and Wales from September 2012 alongside the rise in tuition fees to £9,000 per year. It replaced Plan 1 as the standard undergraduate loan for English and Welsh students.
Repayments are income-contingent: you pay 9% of your gross income above the threshold of £29,385 per year (2026/27, frozen until 2030). If you earn below this, you pay nothing. Repayments are collected automatically through PAYE if you are employed, or through Self Assessment if you are self-employed.
After 30 years from April after you graduate (or leave your course), any remaining balance is written off by the Student Loans Company. This write-off is not treated as taxable income. For the majority of Plan 2 borrowers, this write-off is the actual outcome of their loan — not full repayment.
Plan 2 Interest Rates Explained
Plan 2 uses one of the most complex interest rate structures of any UK student loan. While studying, interest accrues at RPI + 3%. Once you leave your course and are repaying, the rate is income-linked:
- —Earning below the repayment threshold (£29,385): RPI only
- —Earning between £29,385 and £49,130: RPI + between 0% and 3% on a sliding scale
- —Earning above £49,130: RPI + 3% (the maximum rate)
With RPI at elevated levels in recent years, this has meant interest rates of 7–8% for many Plan 2 borrowers. Our calculator uses a fixed estimate of 7.3% to project your balance — the actual rate will vary year by year based on RPI.
Will You Repay Your Plan 2 Loan in Full?
Research by the Institute for Fiscal Studies (IFS) consistently finds that fewer than 25% of Plan 2 borrowers will repay their loan in full before the 30-year write-off. The combination of high starting balances (often £40,000–£60,000 for a typical three-year English degree including maintenance loans), compound interest, and the level of the repayment threshold means that many graduates repay for the full 30 years without clearing the balance.
Graduates who are most likely to fully repay tend to be those with: higher salaries earlier in their careers, lower initial balances (for example, students who received parental support for living costs), or both. Those who enter lower-to-middle salary careers are almost certainly in the write-off group.
Use the calculator above to find your personal projection. The key indicator at the top of your results — green for likely full repayment, amber for likely write-off — is the most important single output of this tool.
Plan 2 vs Plan 5: Key Differences
Plan 5 replaced Plan 2 for students starting courses in England from August 2023. While both apply a 9% repayment rate, they differ in three important ways:
| Feature | Plan 2 | Plan 5 |
|---|---|---|
| Threshold | £29,385 | £25,000 |
| Rate | 9% | 9% |
| Interest | RPI + 0–3% | RPI only |
| Write-off | 30 years | 40 years |
Plan 2 Quick Facts
- Applies toEngland & Wales, from Sept 2012
- Threshold (2026/27, frozen until 2030)£29,385/yr
- Rate9% above threshold
- Interest (max)RPI + 3%
- Write-off30 years
Example repayments
Rounded to nearest £1. Based on 2026/27 threshold of £29,385.
Should you overpay?
For most Plan 2 borrowers — those in the write-off group — voluntary overpayments are not financially rational. You would be paying extra toward a debt that will be cancelled anyway. Use the calculator to determine your group first.
Frequently asked questions
What is the Plan 2 repayment threshold?
For 2025/26, the Plan 2 repayment threshold is £27,295/year (£2,274/month). You repay 9% of earnings above this threshold. If you earn £35,000, you repay 9% of (£35,000 − £27,295) = £693/year or about £57.75/month.
When does a Plan 2 student loan get written off?
Plan 2 loans are written off 30 years after the April you first became eligible to repay — typically April after you graduated or left your course. Most borrowers who started university between 2012 and 2022 will have their loan cancelled around age 51–53.
Does interest accrue on my Plan 2 loan?
Yes. Plan 2 loans accrue interest at RPI + 0% to 3%, depending on income. Below the repayment threshold: RPI only. Above the upper threshold (£49,130): RPI + 3%. Between the two: RPI plus a sliding scale. From 2025 onwards, new Plan 5 rules apply to post-2023 starters.
Will I pay off my Plan 2 loan in full?
Most Plan 2 borrowers are projected to never fully repay — the loan is written off after 30 years. This is particularly true for those with larger balances or lower-to-middle incomes. Whether you repay fully depends on income growth, interest rates, and remaining balance. The 'will I pay off' calculator on this site models this.
Should I make voluntary overpayments on my Plan 2 loan?
Usually not. Since most Plan 2 borrowers will never repay in full, overpayments reduce a balance that would have been cancelled anyway. The exception is if your projected income suggests you will clear the loan before write-off — in that case, overpaying saves interest. Model your specific situation using this calculator before deciding.
Compare All Plans
| Plan | Threshold | Rate | Interest (est.) | Write-off |
|---|---|---|---|---|
| Plan 1 For students who started before 1 September 2012 (England/Wales) or NI students - repay 9% above £26,065, written off after 25 years | £26,065/yr | 9% above threshold | 4.3% | 25 years |
| Plan 2 For students who started on or after 1 September 2012 in England and Wales - repay 9% above £28,470, written off after 30 years | £28,470/yr | 9% above threshold | 7.3% | 30 years |
| Plan 4 (Scotland) For Scottish students - repay 9% above £32,745/yr, written off after 30 years | £32,745/yr | 9% above threshold | 4.3% | 30 years |
| Plan 5 For students starting courses from August 2023 onwards in England - repay 9% above £25,000, written off after 40 years | £25,000/yr | 9% above threshold | 4.3% | 40 years |
| Postgraduate Loan For postgraduate master's and doctoral loans in England and Wales - repay 6% above £21,000, written off after 30 years | £21,000/yr | 6% above threshold | 7.3% | 30 years |