Postgraduate Loan Repayment UK: Full 2026 Guide
You have now completed your postgraduate studies. It could be a master’s or a doctoral program. You receive the letters, your first full-time paychecks, and somewhere among them is an amount that was deducted from your paycheck and that you were not expecting to see. Or perhaps you are yet to begin repayment but would like to understand how it will work by April.
This is entirely natural. The postgraduate loan repayment scheme in the UK is indeed unique compared to undergraduate student loans, and no one ever explains to you what should happen. There is a difference in the thresholds, the interest rates, and the write-off rules, and if you had also acquired a student loan for your first undergraduate degree, then both repayments are ongoing.
This guide covers everything. How much you repay, when it starts, what appears on your payslip, how interest builds up, and what happens if you move abroad. Use our student loan repayment calculator to get your exact monthly figure while you read through the details.
What Is a Postgraduate Loan in the UK
The postgraduate loan UK is an educational loan that the government provides for qualified students pursuing their studies in England or Wales in a Master’s or Doctorate program. The postgraduate loan UK is not dependent on your household income.
In case of a postgraduate Master’s loan, the maximum amount one can borrow in 2026 will be £12,471. This money is paid directly into your bank account in instalments across the academic year, not straight to your university. You can use it however you need, whether that covers tuition fees, living costs, or both.
A postgraduate study loan for Doctoral research follows slightly different repayment timing rules, which are covered further below. Northern Ireland collects postgraduate student loan repayments under the Plan 1 rules. Scotland collects them under Plan 4 rules from April 2021. The information in this guide applies specifically to England and Wales unless stated otherwise.
How a Postgraduate Loan Differs From Undergraduate Plans
This is where a lot of borrowers get confused. Your student loan postgraduate debt is completely separate from any Plan 1, Plan 2, Plan 4, or Plan 5 undergraduate loan you already have. It does not replace them or cancel them out.
Both debts are tracked separately. Both are repaid at the same time once your income crosses the relevant thresholds. They have different repayment rates, different thresholds, and different write-off timelines. If you have an undergraduate loan and a postgraduate loan, two separate calculations run every pay period.
Because this is deducted simultaneously with your undergraduate debt, you should read our guide on repaying more than one student loan.
The Postgraduate Loan Repayment Threshold in 2026
For both the 2025/26 and 2026/27 tax years, postgraduate loan repayment kicks in once your income goes above £21,000 per year. That works out to £1,750 per month or £404 per week.
You repay 6% of everything you earn above that threshold. Nothing below £21,000 counts. If you earn exactly £21,000, you owe nothing that year.
This threshold applies whether you are employed or self-employed. It has not increased for several years running, which means more borrowers are being pulled into repayment as wages rise.
Your income for postgraduate student loan repayment purposes is your gross pay, meaning your earnings before tax, National Insurance, or pension contributions are taken off. This catches a lot of people out.
If you pay into a workplace pension through salary sacrifice, your student loan repayment is still calculated on your full gross salary, not the reduced figure. Pension deductions do not shrink your loan repayment bill.
Unearned income, things like rental profits or savings interest, only count towards your repayment calculation if all three of these apply at the same time:
- You are required to file a self-assessment tax return
- Your unearned income is over £2,000 in that tax year
- Your total income is above £21,000
The £2,000 rule is all or nothing. If your rental income is £1,999, none of it counts. If it is £2,001, all of it counts.
Your HR department handles this deduction automatically as part of your standard employee student loan repayment.
Repaying a Postgraduate Loan Alongside an Undergraduate Loan
James earns £34,000 per year. He has a Plan 2 undergraduate loan and a postgraduate master’s loan.
Plan 2 repayment: £34,000 minus £28,470 = £5,530 x 9% = £497.70 per year / £41.48 per month
Postgraduate repayment: £34,000 minus £21,000 = £13,000 x 6% = £780 per year / £65 per month
Total combined monthly deduction: £106.48
Both deductions appear through PAYE. Both are tracked separately by the Student Loans Company. If you secure a job outside the UK after your Master’s, you must set up an overseas student loan repayment plan based on your new country’s living costs.
Worked Example: Plan 2 Plus Postgraduate Loan
Both repayments run at the same time. Both use gross income as the base. But each plan has its own threshold and its own rate.
Loan Plan | 2026/27 Threshold | Repayment Rate | Write-Off Point |
Plan 1 | £26,065 | 9% | Age 65 or 25 years |
Plan 2 | £28,470 | 9% | 30 years |
Plan 4 | £32,745 | 9% | Age 65 or 30 years |
Plan 5 | £25,000 | 9% | 40 years |
Postgraduate | £21,000 | 6% | 30 years |
Repaying more than one student loan at the same time feels complicated on paper, but the individual calculations are simple. The postgraduate and undergraduate deductions are worked out separately against the same gross income figure. It is highly recommended that graduates frequently review how to check your student loan balance to monitor the higher interest rates attached to these specific loans.
When Do Postgraduate Loan Repayments Start
Master's Loan
For a full-time postgraduate Master’s loan, repayments begin in April of the year after you finish your course, provided your income is above the threshold.
Finish your course in summer 2026, and you start repaying in April 2027.
For part-time Master’s courses that run longer than four years, repayments start in April four years after the course began, even if you are still studying.
Doctoral Loan
The Doctoral postgraduate loan follows a slightly different rule. Repayments start from whichever comes first:
- The April after your course ends
- The April four years after your course started
So if you started a Doctoral course in October 2022, the four-year point lands at April 2026. Repayments begin then, regardless of whether you have submitted your thesis.
Worked Example
Priya finished her full-time Master’s course in June 2026 and started a new job in September 2026, earning £28,000 a year. Even though she is earning well above the threshold, her postgraduate student loan repayments do not begin until April 2027 because the April rule applies.
Priya also has a Plan 2 undergraduate loan. Her Plan 2 repayments started immediately in September 2026 because that is how Plan 2 works. Only the postgraduate repayment wait for April.
How the 6% Repayment Rate Is Calculated
The maths behind postgraduate loan repayment is straightforward. Take your gross income, subtract £21,000, then multiply the remainder by 6%.
Annual salary of £27,000: £27,000 minus £21,000 = £6,000 £6,000 x 6% = £360 per year / £30 per month
The table below shows how repayments look at different income levels.
Annual Salary | Monthly Gross | Monthly Repayment | Annual Repayment |
£22,000 | £1,833 | £5 | £60 |
£25,000 | £2,083 | £20 | £240 |
£28,000 | £2,333 | £35 | £420 |
£32,000 | £2,667 | £55 | £660 |
£40,000 | £3,333 | £95 | £1,140 |
£50,000 | £4,167 | £145 | £1,740 |
Each pay period is looked at separately. If you have a low-income month that drops below £1,750, no deduction is made that month, even if your annual salary is above £21,000. Missing your postgraduate assessments can result in penalty fees and the stressful process of managing student loan arrears.
Three Ways to Repay a Postgraduate Loan
Direct to the Student Loans Company
Direct payments to the SLC apply mainly to borrowers living overseas. They are also available near the end of your loan if you want to switch from PAYE to a direct debit and pay off the remaining balance. Voluntary overpayments can be made directly at any time. These reduce your balance faster, but they do not reduce your current-year PAYE or self-assessment obligation.
Through PAYE If You Are Employed
For most borrowers, employee student loan repayment through Pay As You Earn is the default. Your employer takes the repayment directly from your salary each pay period, alongside your tax and National Insurance.
The Student Loans Company notifies HMRC at the start of the tax year if you are due to start repayments. HMRC then sends a start notice to your employer, who begins calculating deductions from that point. You do not need to arrange anything yourself once this process is running.
Your payslip will show a line for “student loan.” The deduction line will not explain how it was calculated, just the amount taken. If you have both an undergraduate and a postgraduate student loan, some payroll systems show two separate deduction lines. Not all do. Cross-check the figures yourself using the calculator on our site.
Through Self Assessment, If You Are Self-Employed
Self-employed borrowers repay through self-assessment student loan repayment. Your annual tax return includes a section for student loan repayments, and the calculation uses your self-employment profits for that tax year.
If your profits were £26,000 in 2026/27, you owe 6% of £5,000, which is £300. That amount is included in your overall self-assessment bill, due on 31 January 2028.
Student loan repayments are not part of payments on account. You do not need to include them when calculating whether you can reduce your payments on account.
If you are both employed and self-employed, PAYE deductions your employer already made are subtracted from your self-assessment bill. You will not pay twice on the same income.
Reading Your Payslip Correctly
A lot of borrowers look at their payslip after April and see a deduction they were not expecting. Here is what is happening.
Your employer received a start notice from HMRC. That triggered the deduction. The payslip line reads “student loan” or sometimes “PG loan”, depending on the payroll software your employer uses.
The figure on your payslip is based on your gross pay for that specific pay period minus the pro-rated monthly threshold of £1,750. It has nothing to do with your loan balance. The same percentage applies whether you owe £3,000 or £30,000.
If your income fluctuates because of overtime, bonuses, or commission, your monthly deduction will vary. A high-income month means a larger deduction. A low-income month below £1,750 means no deduction at all for that period.
If your annual earnings end up below £21,000 but deductions were still made in some months, you can claim a refund. This happens through self-assessment, through a direct notification from the SLC, or by applying to the SLC directly.
Managing Your Postgraduate Loan: Practical Steps
Keeping on top of your student postgraduate loan does not require complicated financial planning, but there are a few things worth staying on top of.
Log in and verify your balance, confirm repayments are being recorded, and check your repayment plan type is listed correctly.
If there is ever a dispute about whether repayments were made, your payslips are proof. HMRC and the SLC do not always update simultaneously.
if you are self-employed. The student loan repayment section is pre-populated under Making Tax Digital, but it may not always reflect the correct plan type or balance. Contact HMRC if the figures look wrong before submitting.
If you overpay through self-assessment, the excess is first offset against any other outstanding tax or NIC. Only what remains after that is refundable.
if you fall behind, contact the SLC directly and early. Options exist to manage repayment difficulties, but they require you to initiate the conversation.
Living Overseas With a Postgraduate Loan
If you plan to work or travel outside the UK for more than three months after finishing your course, you are required to tell Student Finance England before you leave. PAYE stops working as a collection method the moment you leave the UK payroll system.
This is a legal obligation, not optional. Living overseas with a student loan does not cancel the debt or pause interest.
Frequently Asked Questions
What is the postgraduate loan repayment threshold in 2026?
The threshold is £21,000 per year, £1,750 per month, or £404 per week. You repay 6% of earnings above this figure. The threshold applies to both the 2025/26 and 2026/27 tax years.
When do postgraduate loan repayments start for a Master's graduate?
Repayments start in April of the year after you finish your course. If you completed your Master’s in summer 2026, your repayments begin in April 2027, regardless of when you started work.
Can I repay my postgraduate loan early?
Yes. You can make voluntary overpayments directly to the Student Loans Company at any time. These reduce your balance faster. They do not, however, reduce your current-year PAYE or self-assessment obligation.
Do I repay my postgraduate loan and undergraduate loan at the same time?
Yes. Both run concurrently. Each uses your gross income as the base but applies its own separate threshold and rate. You will see separate deductions on your payslip or separate line items on your self-assessment bill.
Is postgraduate loan repayment the same across Scotland, Wales and Northern Ireland?
No. In Northern Ireland, postgraduate loans are collected under Plan 1 rules. In Scotland, they are collected under Plan 4 rules from April 2021.
What is the postgraduate loan interest rate?
Interest is charged at RPI plus 3% from the date of your first payment. It runs continuously on your outstanding balance until the loan is fully repaid or written off at the 30-year mark.
