Plan 2 essentials
- Repayment threshold for 2026-27: £29,385 per year (up from £28,470)
- Repayment rate: 9% of income above the threshold
- Interest rate: RPI to RPI+3% sliding scale based on income (3.2% to 6.2% currently)
- Loan written off 30 years after the April you became liable to repay
- Around 75% of Plan 2 borrowers will not repay in full before write-off (IFS estimate)
Not sure? Check your account at gov.uk.
Frequently asked questions
Why did the Plan 2 threshold change?
After being frozen at £27,295 from 2021-22 to 2024-25, the government unfroze the Plan 2 threshold. It rose to £28,470 in 2025-26 and to £29,385 for 2026-27. The 2025 budget then said it will be frozen at £29,385 for three years from April 2027.
Should I overpay my Plan 2 loan?
For most Plan 2 borrowers, no. The combination of high interest (up to 6.2%), high typical balance (£40k-£60k), and 30-year write-off means most will never clear the loan. Overpaying when your loan will be written off is money handed back to the government for nothing. Use the calculator above with an overpayment amount — if it shows the loan being written off either way, don't overpay.
What's the interest rate on Plan 2?
It's a sliding scale. While studying and in your first year after graduation, it's RPI + 3% (currently 6.2%). After that, it depends on your salary: RPI only if you earn at or below £29,385, scaling up to RPI + 3% if you earn above £52,885. The calculator above models this automatically.