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From 6 January 2024, the main rate of class 1 National Insurance contributions (NIC) deducted from employees’ wages is reduced from 12% to 10%. From 6 April 2024, the main rate of self-employed class 4 NIC will reduce from 9% to 8% and class 2 NIC will no longer be due. Those with profits below £6,725 a year can continue to pay class 2 NIC to keep their entitlement to certain state benefits. Our guidance will be updated in full in spring 2024.

Updated on 6 April 2023

Repaying more than one student loan

Depending on where you live and when you studied on your courses, it is possible you have more than one student loan but under different plan types. For example, a Plan 1 and a Plan 2 loan, or perhaps a Plan 2 and a Plan 4 loan. 

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More than one student loan: how repayments work

If you are unsure what loans you have you should contact the Student Loans Company (SLC).

If you have more than one student loan on different Plan 1, Plan 2 or Plan 4 loan agreements then you will still make one repayment, for example through your payroll or through self assessment if you complete a tax return.

If you are an employee, your form P45 will not show which type of loan(s) you have, so your employer should ask you what student loans you are repaying. If you do not confirm what loan type you have, you will automatically be allocated a Plan 1 loan and this may result in incorrect repayments being deducted through Pay As You Earn (PAYE).

  Please note: this differs from how postgraduate loans are collected if you are also repaying a Plan 1, Plan 2 or a Plan 4 loan.

Your student loan repayment will be allocated against the two types of loans depending on how much you earn and the repayment thresholds for the loans.

Allocation of repayments: more than one student loan

Different student loan plans have different repayment thresholds. If you have more than one student loan under Plan 1, Plan 2 or Plan 4, your repayments would be allocated as follows:

  • For earnings below the lowest repayment threshold of your plan types – you make no loan repayments.
  • For earnings between the lowest repayment threshold and the repayment threshold of your other plan type – you will make loan repayments towards your plan with the lowest repayment threshold.
  • For earnings above your highest repayment threshold – your repayments will be allocated towards both loans.

Plan 1 and Plan 2 loans: repayment allocation

For the 2023/24 tax year, the repayment thresholds are as follows:

  • Plan 1 loans: £22,015
  • Plan 2 loans: £27,295

If you earn below £22,015, you will make no loan repayments.

If you earn between £22,015 and £27,295, you will make Plan 1 loan repayments only.

If you earn over £27,295, you will make repayments which will be spread across both your Plan 1 and Plan 2 loans. Repayments calculated on income between £22,015 and £27,295 will be allocated against your Plan 1 loan and repayments calculated on your income above £27,295 will be allocated against your Plan 2 loan.

Example: Nathan

Nathan has completed two courses, one started in 2009 and one in September 2016. He has two student loans, one is a Plan 1 loan and one is a Plan 2 loan. He finished his second course in July 2019 and after spending some time travelling and volunteering he started his first employee job in April 2023. If he earns over the repayment thresholds his first repayment will be due in April 2023.

Nathan earns £17,000 per year

Nathan is not earning above the repayment threshold for either his Plan 1 or Plan 2 loans and so will not start repayments.

Nathan earns £23,000 per year

Nathan is earning above the Plan 1 threshold but not above the Plan 2 threshold. This means that he will make repayments towards his Plan 1 loan but not towards his Plan 2 loan.

His annual repayment towards his Plan 1 loan is £88.65, or £7.38 per month and is calculated as:

£23,000 less £22,015 (repayment threshold) x 9%. So £985 x 9% which is £88.65.

Nathan earns £28,000 per year

Nathan is earning above the Plan 1 and the Plan 2 repayment thresholds. Although Nathan will only see one deduction on his payslip, which totals £538.65 across the tax year or £44.88 per month, this will be split between his two student loans.

The annual repayments are calculated as (£28,000 - £22,015) x 9%, so £5,985 x 9% = £538.65.

The allocation is then split as follows:

Plan 1 loan: £27,295 - £22,015 (the Plan 1 repayment threshold) at 9%

= £5,280 x 9% = £475.20 per year or £39.60 per month

Plan 2 loan: £28,000 - £27,295 (the Plan 2 repayment threshold) at 9%

= £705 x 9% = £63.45 per year or £5.28 per month.

If Nathan is not an employee but is self-employed and made profits of £28,000, he would complete a self assessment tax return. His repayments will still be calculated as £538.65 for the 2023/24 tax year and will be allocated the same as above.

Plan 2 and Plan 4 loans: repayment allocation

For the 2023/24 tax year the repayment thresholds are:

  • Plan 2 loans: £27,295
  • Plan 4 loans: £27,660

If you earn below £27,295 you will make no loan repayments.

If you earn between £27,295 and £27,660 you will make Plan 2 loan repayments only.

If you earn over £27,660 you will make repayments which will be spread across both your Plan 2 and Plan 4 loans. This means that repayments calculated on income between £27,295 and £27,660 will be allocated against your Plan 2 loan and repayments calculated on your income above £27,660 will be allocated against your Plan 4 loan.

Example: Dan

Dan has completed two courses, one started in 2009 and one in September 2018. He has two student loans, one was a Plan 1 Scottish student loan which has changed to a Plan 4 loan from April 2021 and one is a Plan 2 loan. He finished his second course in July 2019 and started work soon after graduating from his second course. Dan earns £32,000 per year and for the 2023/24 tax year his repayments will look like this:

As Dan is earning above the Plan 4 and the Plan 2 repayment thresholds, he will be repaying both of his loans. Although Dan will only see one deduction on his payslip which totals £423.45 across the tax year or £35.29 per month, this will be split between his two student loans.

The annual repayments are calculated as (£32,000 - £27,295) x 9%. So £4,705 x 9% = £423.45.

This is then split as follows:

Plan 2 loan: £27,660- £27,295 (the Plan 2 repayment threshold) at 9%

= £365 x 9% = £32.85 per year or £2.74 per month

Plan 4 loan: £32,000 - £27,660 (the Plan 4 repayment threshold) at 9%

= £4,340 x 9% = £390.60 per year or £32.55 per month.

Direct debit repayments: more than one loan

Towards the end of repaying your loans, you can switch to monthly direct debits when you have fully repaid one loan and you expect to finish repaying your other loan over the next two years. See the heading Opting out of Plan 1, Plan 2 and Plan 4 repayments on our Employees: student loan repayments page.

Repayment start dates: more than one loan

If you have more than one student loan, you start to repay your loan if you are earning over the repayment threshold from the April after you graduate from each course separately.

For example, if you have both a Plan 1 and Plan 2 loan and you graduated from your first course in July 2012 and from your second course in July 2023 and begin a new job in August 2023 earning £28,000 annually then you will immediately start repaying your Plan 1 loan as you graduated from the course in July 2012, but you will not start repaying your Plan 2 loans until the April after you graduated from that course, so Plan 2 repayments will start from April 2024.

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