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Student loans

Updated on 5 April 2023

Students

This section looks at the repayment of student loans through the tax system whether you are employed or pay tax through Self Assessment. It also covers what to do if you have a student loan and go abroad for more than three months.

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What has tax got to do with student loans?

The main way of repaying loans taken out since 1998 is via the tax system. You will deal with both the Student Loans Company (SLC) and HM Revenue & Customs (HMRC) when you leave or finish your studies and start paying back what you owe.

Student loans are borrowings from the UK government to help you live and pay your course fees. You usually pay them back when you leave or finish your studies. How much you can borrow depends on your personal circumstances, but we do not cover that aspect of student loans. If you are wondering how much you can get, we suggest you look at the student finance section on GOV.UK. 

Which student loans are repaid through the tax system?

Our guidance is about income-based or income-contingent loans, which were first introduced in the autumn of 1998 and are repaid via the tax system.

We do not look at the ‘mortgage-style loans’ in place up to autumn 1998, because the repayments for those work differently. If you think yours is a mortgage-style loan, take a look at the Student Loans Company’s repayment website (which was archived in 2019).

There are five main types of income-contingent loans, which are referred to as ‘Plan 1’, ‘Plan 2’, postgraduate, ‘Plan 4’ and 'Plan 5' loans. Which one(s) you have depends on what type of course you are on, when you took out the loan and which part of the UK you studied in – England, Northern Ireland, Scotland or Wales. It is possible to have more than one type of loan if you have been on more than one course. You should contact the Student Loans Company (SLC) if you are unsure which type(s) of loan you have.

There is information on GOV.UK about student finance if you are a student from Guernsey, Jersey or the Isle of Man.

Plan 1 loans generally include:

  • loans for Scottish (up to April 2021) and Northern Irish undergraduates and postgraduates
  • loans for English and Welsh undergraduates if you started your course before 1 September 2012

Plan 2 loans generally include:

  • loans for English undergraduates if you started your course from 1 September 2012 to 31 July 2023
  • loans for Welsh undergraduates if you started your course on or after 1 September 2012
  • Advanced Learner Loans from 1 August 2013 to 31 July 2023

  • Higher Education Short Course loans on or after 1 September 2022

Postgraduate loans generally include:

  • loans for English and Welsh postgraduate students where repayments started after April 2019. The way repayments are calculated for these postgraduate loans is different to repayments for Plan 1, Plan 2 and Plan 4 loans and we explain more about this in our postgraduate loans page.

Plan 4 loans:

  • these started from April 2021 and replaced Plan 1 loans for Scottish undergraduates and postgraduates only.

Plan 5 loans:

  • these new loans for English undergraduates will start from 1 August 2023 so will not be repaid yet. We will update our guidance in due course to explain how these loans will be repaid via the tax system
  • Advanced Learner Loans from 1 August 2023

All of these types of student loan are repaid via the tax system. Repayments of student loans are not deductible expenses for tax purposes. You should receive an annual statement each April detailing your loan balance, interest charged and any repayments made. These statements moved online from April 2020 but you can request a paper version if you prefer. The student loans online repayment service shows up-to-date information on repayments and loan balances. You can access your online student loan repayment account through GOV.UK.

It is very important that the SLC have up-to-date contact details for you, especially if you move abroad or are close to finishing repaying your loan.

In the subsequent pages, we cover how and when you pay back your student loans, whether you are an employee or complete a Self Assessment tax return. To use this guidance you need to select whether you are repaying a Plan 1, Plan 2, postgraduate, or Plan 4 loan or a combination of these loans:

We also cover what to do about repaying your student loan if you go abroad for more than three months.

You should be aware that students are often targeted by fraudsters pretending to be either the SLC or HMRC. There is information on GOV.UK about these types of phishing and online scams. 

When are student loans written off?

This depends on the loan type, where the borrower lived when they took out the loan and when the course started. Loans are written off on death and there is discretion to write off loans earlier if the borrower receives a disability-related benefit and is permanently unable to work (there is more information about this on GOV.UK).

Type of loan

When is loan written off?

Plan 1

It depends when you took out the loans- there is more information on GOV.UK

Plan 2

30 years after it becomes eligible to be repaid

Postgraduate (England and Wales)

30 years after it becomes eligible to be repaid

Plan 4

 It depends on when you took out the loans- there is more information on GOV.UK

 

If you received a full-time student maintenance loan from Student Finance Wales then you may be able to have up to £1,500 of your maintenance loans cancelled, see GOV.UK for more information.

What to do when the borrower dies?

Unfortunately, student loans are not covered by the government’s Tell Us Once scheme so you will need to inform the Student Loans Company (SLC) of a borrower’s death to cancel their student loan. There is more information on this on GOV.UK. For general help on tax-related duties, see the Bereavement and tax guide on our website.

Where can I find out more about student loan repayments?

There is information on GOV.UK about the repayment of different types of loans.

GOV.UK has a section on student finance explaining what loans you may be eligible to apply for.

Details of how to contact the Student Loans Company are on GOV.UK and HMRC have a guide on how to complete the student loan questions on a Self Assessment tax return.

Below is a flowchart explaining how you can repay your student loans if you are on a Plan 1, Plan 2, Plan 4 or Postgraduate loan.

How do I repay my Plan 1 or Plan 2 student loan? by LITRG

How do I repay my Plan 4 student loan? by LITRG

How do I repay my postgraduate loan? by LITRG

Tax guides

Introduction to the tax system How do I work out my tax? What income is taxable? What tax allowances am I entitled to? What tax rates apply to me? How is my tax collected? What if I cannot pay my tax bill? Do I need to complete a tax return? Self Assessment: understanding the basics What is Simple Assessment? How do I claim tax back? How do I claim back tax I have overpaid through PAYE on wages or pensions? How do I claim back tax if I complete a tax return? How do I claim back tax if I am taxed under the Construction Industry Scheme (CIS)? How do I claim back tax on savings income? How do I claim a marriage allowance refund? How do I claim back tax on a payment protection insurance (PPI) pay-out? Should I use a tax refund company? What is National Insurance? How do I get a National Insurance number? What are Specified Adult Childcare credits? What is Scottish income tax? What is devolution? Do I have to pay Scottish income tax? How does Scottish income tax work? What is Welsh income tax? Do I have to pay Welsh income tax? Do I have to join a pension scheme? Tax relief on your pension contributions HMRC digital services Enquiries, penalties, appeals, complaints and debt Enquiries How to survive an enquiry by HMRC Tax penalties Tax appeals Alternative Dispute Resolution How do I complain to HMRC? What if I cannot pay my tax bill? What if I have a tax credits overpayment?
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