How and when do I pay back my Plan 1 student loan?

Updated on 5 April 2023

Students

First, check this guidance is for you. Do you have a ‘Plan 1’ student loan?

⚠️ This page covers only Plan 1 income-contingent student loans. Repayments on ‘Plan 2’ loans started to be collected via the tax system from April 2016 and repayments on postgraduate loans started from April 2019. Some Plan 1 loans changed to Plan 4 loans from April 2021.

Illustration of a person next to a student loan document

⚠️ You should contact the Student Loans Company (SLC) if you are unsure which type of loan you have.

How much are Plan 1 student loan repayments?

In very basic terms, student loan repayments are due at a rate of 9%:

on your earnings over £22,015 a year (from 6 April 2023 to 5 April 2024; for 2022/23 the threshold was £20,195), whether from employment or self-employment
on other income over £2,000 a year if you are required to fill in a tax return under Self Assessment and have total income above the £22,015 repayment threshold.

How are Plan 1 student loans paid back?

There are basically three ways of repaying:

through your wages, under Pay As You Earn (PAYE)
through HM Revenue & Customs’ Self Assessment system
direct to the Student Loan Company (SLC).

How do you know which one (or more than one, in some cases) applies to you? Use the table below as a guide.

Would you answer ‘yes’ to the questions below?		Then your student loan will be repaid by:
Are you employed in the UK?	→	PAYE
Are you self-employed in the UK?	→	Self Assessment
Do you have other income (for example rents) and HMRC ask you to fill in a tax return?	→	Self Assessment
Are you employed and self-employed?	→	PAYE and Self Assessment (but you don't pay twice – sums taken under PAYE come off your Self Assessment bill)
Are you going or have you gone abroad?	→	Direct payments to the SLC
Have you nearly repaid your loan in full?	→	Possible opt out of PAYE deductions and switch to a direct debit to the SLC
Do you want to make extra payments direct to the SLC?	→	Direct payments to the SLC ⚠️ Caution: warning below*

*If you make voluntary or extra payments to the SLC, this does not reduce any amount that you might owe under PAYE or Self Assessment. Instead, you pay off your loan faster.

When do I start paying back my Plan 1 student loan?

You will usually start repaying your loan at the start of the tax year after you finish or leave your course. For example, if you completed your course in June 2022 then the first student loan repayment would start to be deducted in the following tax year, 2023/24, so from April 2023.

But repayments only start if you earn over the ‘repayment threshold’. Your earnings are calculated before taking off tax or National Insurance contributions (NIC).

The repayment threshold changes each year:

2021/22 (the tax year to 5 April 2022): £19,895
2022/23 (the tax year to 5 April 2023): £20,195
2023/24 (the tax year to 5 April 2024): £22,015

The subsequent pages explain the various ways of collecting repayments and how they are calculated for:

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?

Am I employed, self-employed, both or neither? Working through a limited company What is the national minimum wage? 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? How is tax collected on taxable state benefits? How do I check my coding notice? Do I need to complete a tax return? What tax do I pay on redundancy payments?Employment benefits and expenses What are benefits-in-kind? What payments and benefits are non taxable? What if I incur expenses in relation to my job? What travel expenses can I claim? What if I use my own car for business purposes? Payroll giving Allowances and expenses paid to armed forces personnel and deductions from their income Pensions and employees What is automatic enrolment for employees? What National Insurance do I pay as an employee? How do I repay my student loan? What if I do not pay enough tax? What if I pay too much tax? What if I work abroad temporarily? What if I am in the armed forces and work overseas? First time workers Apprenticeships

Am I employed, self-employed, both, or neither? How do I register for tax and National Insurance? What business records should I keep? Working out profits, losses and capital allowances When do I make Self Assessment payments and file my tax return? How do I pay tax on self-employed income? What tax allowances am I entitled to? What is the trading allowance? What National Insurance do I pay if I am self-employed? What is the Construction Industry Scheme (CIS)? Tax checks for taxi, private hire and scrap metal licences How do I work out my profits for universal credit? Do I have to pay VAT if I am self-employed? What is Making Tax Digital for VAT? Pensions and self-employment How do I repay my student loan if I am self-employed? Introduction to enquiries

Tax status Setting things up How the Pay As You Earn system works Taking on a new employee Reporting PAYE in real time Pay and deductions Ongoing payroll tasks End of year processes Employee leaving Employment law Keeping records Getting things wrong Getting more help

Can I live and work in the UK? Residence and Domicile Employment and self-employment National Insurance for migrants Coming to the UK to study Other migrant issues EU and EEA countries

Going abroad Other income Student loans Types of student Volunteering and training Working Do students have to pay council tax? Glossary of Forms Jargon buster Where can I get further help and information?

Help for employees and the self-employed Help for employers Independent living Caring for someone VAT reliefs for disabled and older people Trusts for disabled people Apprenticeships and disability

Savings and tax Property income Council tax and rates Giving to charity Income from a trust or from the estate of a deceased person Capital gains tax Cryptoassets and tax Do I need to register my trust?

Tax credits and benefits Tax credits State benefits Child benefit Universal credit

Employer-supported childcare Free childcare places Tax credits childcare support Universal credit Other childcare support Tax-free childcare

Taxes on death: overview Dealing with the deceased's own tax affairs Tax on income and gains after death Death of a spouse or civil partner Joint property on death Pension and life assurance policies on death Income from a deceased's person's estate Inheritance tax reliefs and exemptions State benefits on death Getting help with bereavement and inheritance tax Bereavement jargon buster

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