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Student loan debt

Student loan debt. What to do if you are in arrears

Most people need a student loan to enter full time education. These tend to become a problem after study when the time comes to pay them back.

Student loans usually cover:


  • Tuition fees
  • Accommodation
  • Living costs

Make a budget to keep track of things while you pay the loan off.

The difference between old style loans and new style loans

You may have heard student loans being described as either 'old style' or 'new style'.

What kind of student loan you have depends on when your course began:

Before 1998

These are old-style loans. Or "mortgage-style" loans.

This kind of loan is registered under the Consumer Credit Act (CCA).

Old style loans are repayable over five years, or seven years if the original course lasted more than three years.

After 1998

These are new style loans, or "income-contingent" loans.

This type of loan is deducted:


  • At source from your wages
  • As monthly instalments
  • Once you earn above a certain threshold

How do I defer a student loan?

Old-style student loans

You can defer your student loan repayments if your income is below a threshold.

In 2024, this is:


  • £30,737 per year
  • £2561.42 a month

Contact the company who deals with your loan. This will be either:


Deferral lasts 12 months and interest is still added in this time.

New style student loans

Your loan payment is automatically deferred each year if you earn below the income threshold.

The income threshold depends on what payment plan you are on. You cannot negotiate lower payments.

Your payment plan is based on either:


  • Where you studied
  • When you studied
  • What type of degree you got

You repay 9% of your income over the threshold if you are on:


  • Plan 1
  • Plan 2
  • Plan 3
  • Plan 4

You repay 6% of your income over the threshold if you are on a Postgraduate Loan plan.

Need help managing your student loan debt payments?

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What student loan payment plan am I on? How much do I need to pay?

Plan 1

Your course began before 1 September 2012.

In 2024, the income threshold is:


  • £24,990 a year
  • £2,082.50 a month

This means you need to pay:


  • 9% of any income over £2,082.50 a month

For example:


  • You make £30,000 a year
  • That equals £2,500 a month
  • £2,500 - £2,082.50 = £417.50
  • So you need to pay 9% of £417.50
  • 9% of £417.50 is £37.58
  • You need to pay £37.50 every month

The loan is written off either:


  • 25 years after the April you were first due to repay (If your first loan was paid on or after 1 September 2006)
  • When you are 65 (If the first loan was paid before 1 September 2006)

Plan 2

Your course began between 1 September 2012 and 31 July 2023 and you either:


  • Study an undergraduate course
  • Study a Postgraduate Certificate of Education (PGCE)
  • Take out an Advanced Learner Loan

You are also on Plan 2 if:


In 2024, the Plan 2 Threshold is:


  • £27,295 a year
  • £2,274 a month

This means you need to pay:


  • 9% of any income over £2,274 a month

For example:


  • You make £30,000 a year
  • That equals £2,500 a month
  • £2,500 - £2,274 = £226
  • So you need to pay 9% of £226
  • 9% of £226 is £20.34
  • You need to pay £37.50 every month

The loan is written off:


  • 30 years after the April you were first due to repay

Postgraduate Loan plan

You studied a postgraduate master’s or doctoral course.

In 2024, the Postgraduate Loan plan threshold is:


  • £21,000 per year
  • £1,750 a month

This means you need to pay:


  • 6% of any income over £1,750 a month

For example:


  • You make £25,000 a year
  • That equals £2,083.33 a month
  • £2,083.33 - £1,750 = £333.33
  • So you need to pay 9% of £333.33
  • 9% of £333.33 is £30
  • You need to pay £37.50 every month

The loan is written off:


  • 30 years after the April you were first due to repay

Plan 4

You applied to Student Awards Agency Scotland.

Whether you studied an undergraduate or a postgraduate course.

In 2024, the Plan 4 threshold is:


  • £31,395 a year
  • £2,616 a month

This means you need to pay:


  • 9% of any income over £2,616 a month

For example:


  • You make £35,000 a year
  • That equals £2,916.67 a month
  • £2,916.67 - £2,616 = £300.67
  • So you need to pay 9% of £300.67
  • 9% of 300.67 is £27.06
  • You need to pay £27.06 every month

The loan is written off either:


  • 30 years after the April you were first due to repay (If the first loan was paid on or after 1 August 2007)

Or whichever of the following is first:


  • When you are 65 (If the first loan was paid before 1 August 2007)
  • 30 years after the April you were first due to repay ( If the first loan was paid before 1 August 2007)

Plan 5

Your course began on or after 1 August 2023 and either:


  • You study an undergraduate course
  • You study a Postgraduate Certificate of Education (PGCE)
  • You take out an Advanced Learner Loan

In 2024, the Plan 5 income threshold is:


  • £25,000 per year
  • £2,083.33 a month

This means you need to pay:


  • 9% of any income over £2,083.33 a month

For example:


  • You make £35,000 a year
  • That equals £2,916.67 a month
  • £2,916.67 - £2,083.33 = £833.34
  • So you need to pay 9% of £833.34
  • 9% of 300.67 is £27.06
  • You need to pay £75 every month

The loan is written off:


  • 40 years after the April you are first due to repay

I am struggling with my student debt being taken from my wage

Use our online advice tool to find the best options for you.