Student loan Plan 1 repayments

On a Plan 1 student loan you repay 9% of everything you earn above £26,900 a year in 2026/27. Payroll works this out each payday using a monthly threshold of £2,241.66 or a weekly threshold of £517.30. If you earn less than that in a pay period, nothing is taken. Interest on Plan 1 was 4.1% on gov.uk at the time of checking.

Who has a Plan 1 loan

Plan 1 covers two groups: students from England or Wales who took out loans under the older system, before Plan 2 was introduced, and students from Northern Ireland, whose undergraduate loans are still Plan 1. The exact course start dates are on gov.uk under “which repayment plan you are on”.

That means Plan 1 borrowers in England and Wales are mostly people who graduated some years ago, while in Northern Ireland recent graduates are on it too. Nurses, teachers and allied health professionals trained in Northern Ireland and now working in Health and Social Care trusts or schools there will usually be on Plan 1. Public sector jobs in Northern Ireland covers the employers.

If you are not sure, sign in to your Student Loans Company account. It lists each loan and its plan.

What it costs on public sector salaries

These examples assume an even salary, Plan 1 only, and no Postgraduate Loan.

Salary (2026/27)	Example post	Earnings over £26,900	Repayment a year	About a month
£28,608	NJC pay point SCP 10	£1,708	£153.72	£13
£32,073	NHS band 5 entry, England	£5,173	£465.57	£39
£39,959	NHS band 6 entry, England	£13,059	£1,175.31	£98
£46,940	Teacher M6, England outside London	£20,040	£1,803.60	£150

The NJC figure is for a full-time post. Many school support staff work part-time or term-time only, in which case the actual pay, not the full-time equivalent, is what counts. A teaching assistant on a full-time rate of £28,608 working term-time and fewer hours could easily be paid less than £26,900 and repay nothing. Teaching assistant pay explained shows how that works.

How the deduction is worked out

Payroll compares your gross pay in each period with the Plan 1 threshold for that period. For monthly pay of £3,000, the calculation is £3,000 minus £2,241.66 = £758.34, and 9% of that is about £68.

Each period stands alone. If you work extra bank shifts or get a pay award arrears payment one month, the repayment that month goes up. If you take unpaid leave and earn less than £2,241.66, nothing is taken. Over the year, you may have repaid more than 9% of your annual income above £26,900. If your total income for the year ended up below £26,900, you can ask the Student Loans Company for a refund.

Pension contributions under a net pay arrangement do not reduce the pay used for student loans; the calculation is on gross pay. Salary sacrifice schemes do reduce it, because they reduce your contractual pay.

Plan 1 with other loans

If you also have a Plan 2, Plan 4 or Plan 5 loan, you repay 9% in total above the lowest threshold that applies. With Plan 1 and Plan 2, that is 9% above £26,900, shared between the two.

A Postgraduate Loan is different. It is repaid at 6% above £21,000 on top of your Plan 1 deduction. Someone with both, earning £32,073, would repay £465.57 on Plan 1 and £664.38 on the Postgraduate Loan. See postgraduate loan repayments.

When Plan 1 ends

Plan 1 loans are written off after a set time or at a set age depending on when you took them out, and also if you die or become permanently unable to work because of disability. The rules for your loan are in the Student Loans Company terms and conditions on gov.uk, and your online account shows the expected write-off date.

As you approach the end of your loan, the Student Loans Company can switch you to repaying by direct debit so you do not overpay through payroll in the final months. Keep your contact details up to date in your account so they can reach you.

If the deduction looks wrong

Check three things on your payslip: the plan type, whether the deduction matches 9% of your pay above the threshold, and whether your employer is using the right pay period. If payroll has you on Plan 2 when you are on Plan 1, you will be repaying less than you should, and the Student Loans Company will collect the shortfall later. The other way round costs you money each month.

Tell payroll and the Student Loans Company. Payroll can only act on the plan type HMRC gives them, so the fix may need to come through HMRC’s notice to your employer. Student loan repayments from salary covers the general rules for all plans.