Student loan debt: repayments and debt solutions

For most people with a student loan, the loan is not the debt that is causing the problem. Repayments come out of your pay automatically at a level set by your income, and stop if your income drops below the threshold. What matters when you are dealing with other debts is knowing that the student loan stays outside any debt solution, and that the repayments stay in your budget.

The exception is older “mortgage-style” loans taken out before September 1998, which work more like ordinary loans. They are covered further down.

How much do you repay on a student loan in 2026/27?

You repay a percentage of your income above the threshold for your plan: 9% for Plans 1, 2, 4 and 5, and 6% for a Postgraduate Loan. How much you owe makes no difference to the monthly amount.

These are the thresholds for the tax year from 6 April 2026 to 5 April 2027. The Plan 1 threshold rises to £28,005 from 6 April 2027.

If you are employed, your employer takes repayments through payroll. If you are self-employed, HMRC works them out through your Self Assessment tax return. Repayments stop automatically if you stop working or your income falls below the threshold, although interest is still added.

Which student loan plan are you on?

You cannot choose your plan. It depends on where you applied from and when your course started:

• England: Plan 1 if you started before 1 September 2012, Plan 2 if you started between 1 September 2012 and 31 July 2023, Plan 5 if you started on or after 1 August 2023.
• Wales: Plan 1 if you started before 1 September 2012, Plan 2 after that.
• Scotland: Plan 4.
• Northern Ireland: Plan 1.
• Master’s and doctoral loans from England and Wales are Postgraduate Loans.

You can check your plan in your online repayment account. If you have more than one plan, you still make one repayment, worked out on the lowest threshold.

When is a student loan written off?

Any balance left is cancelled after a set period:

• Plan 1: 25 years after the April you were first due to repay, or at age 65 if your first loan was paid before 1 September 2006.
• Plan 2 and Postgraduate Loans: 30 years after the April you were first due to repay.
• Plan 4: 30 years after the April you were first due to repay. If your first loan was paid before 1 August 2007, it is written off at 65 if that comes sooner.
• Plan 5: 40 years after the April you were first due to repay.

The loan is also cancelled if the borrower dies, and the Student Loans Company may cancel it if you can no longer work because of illness or disability and claim certain disability benefits.

What about older mortgage-style student loans?

If you took out a student loan before 1 September 1998, it is probably a “mortgage-style” loan. These work differently:

• Fixed repayments. You repay a set monthly amount, usually by Direct Debit, rather than a share of your income.
• Deferment if your income is low. You can apply to put repayments off for 12 months at a time. From 1 September 2026 to 31 August 2027 you can apply if your gross income is £44,311 a year or less. Keep paying until your deferment is confirmed in writing, and apply again each year.
• Normal credit rules. These loans are regulated by the Consumer Credit Act 1974. If you fall behind, the company running the loan can pass it to a collection agency or go to the county court for a county court judgment.
• Who to contact. Many of these loans were sold to private companies. Contact whoever administers yours: the name is on your statements.

A mortgage-style loan in arrears is a non-priority debt: the lender has to go to court before it can use bailiffs or other enforcement. Our guide to priority debts explains why rent, council tax and energy come first.

Can student loans go into an IVA, DRO or bankruptcy?

No. Government student loans are left out of all three, and out of a Breathing Space too.

• IVA: student loans cannot be included in an IVA approved on or after 6 April 2010. Repayments through your pay carry on as normal, and the insolvency practitioner counts them in your budget.
• Debt relief order: student loans cannot be included.
• Bankruptcy: student loans are not cleared by bankruptcy. This applies to mortgage-style loans too, which have not been provable in bankruptcy since 1 July 2004.
• Breathing Space: student loans are one of the debts it does not cover.

Having a student loan does not in itself stop you using a debt solution for your other debts. In an IVA, your payment is worked out on what is left after your student loan repayments. See what debts can go into an IVA for the full list of exclusions. In Scotland, where the options are different, student loans do not count towards the £25,000 debt limit for the Minimal Asset Process: see debt solutions in Scotland.

Student overdrafts and other borrowing are different

Only government student loans get these special rules. Borrowing you used while studying is ordinary credit:

• Student and graduate overdrafts are bank debts. Some banks start charging interest or turn the overdraft into a loan after you graduate, so check the terms of your account.
• Credit cards and loans from a bank or private lender, including loans to pay for a course, are ordinary credit.
• Money owed to a university or college, such as accommodation arrears, is also an ordinary debt, though National Debtline suggests treating accommodation arrears as a priority because you could lose your room.

These debts can generally go into an IVA, DRO or bankruptcy like any other unsecured debt. Debt solutions compared sets out how the options differ.

What to do next

1. Check your plan type and balance in your online student loan account, and make sure your employer is using the right plan.
2. If you have a mortgage-style loan and your income is £44,311 a year or less, apply for deferment before you miss a payment.
3. If other debts are the problem, list them separately from your student loan. Free, impartial debt advice is available from MoneyHelper, StepChange, Citizens Advice and National Debtline: see where to get free debt advice.

For other kinds of debt and how each is treated, see types of debt. If you use our checker, we may pass your details to a licensed insolvency practitioner or debt adviser.