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Plan 5 is the new repayment scheme for students who start an undergraduate or Advanced Learner Loan course on or after 1 August 2023.
Here is a simple breakdown of how this plan works.
1. When Do Repayments Start?
The good news is you won’t have to start paying back your loan until April 2026 at the earliest. This applies even if you leave your course early.
The key rule is that you only start making repayments if your income is over the official repayment threshold.
2. What is the Repayment Threshold?
For the 2026-27 tax year, you will only start making repayments if your income is more than:
- £25,000 a year
- £2,083 a month
- £480 a week
If your income falls below this threshold, your repayments will automatically stop. They will only start again when your income rises above the threshold.
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3. How Much Do I Pay Back?
You will repay 9% of the income you earn over the repayment threshold (currently £25,000 a year).
If your income changes—either rising or falling—your repayment amount will automatically change to match it.
Here are some examples of what you might repay:
| Annual Income (Before Tax) | Monthly Income (Before Tax) | Approximate Monthly Repayment |
| £25,000 | £2,083 | £0 |
| £28,000 | £2,333 | £22 |
| £29,500 | £2,458 | £33 |
| £31,000 | £2,583 | £45 |
| £33,000 | £2,750 | £60 |
4. Can I Pay Extra?
Yes, you can always choose to make additional, voluntary repayments to the Student Loans Company (SLC) at any time.
5. What if I Pay While My Income is Low? (Refunds)
If you are employed and your annual income is below the £25,000 threshold, you might still see some money taken out of your pay.
This can happen if you work extra hours or get a bonus, which pushes your weekly or monthly pay above the weekly or monthly threshold for a short period.
If your total annual income for the tax year was less than the £25,000 annual threshold, you can get a refund for these repayments.
- Important: This refund does not happen automatically.
- You must request a refund through your repayment account by visiting: www.gov.uk/sign-in-to-manage-your-student-loan-balance
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