Postgraduate Loan Repayment 2026/27: How It Works
A plain-English guide to UK Postgraduate Loan repayments for 2026/27: the GBP 21,000 threshold, the 6% rate, how it stacks with other plans, and what you actually pay.
Quick answer
For 2026/27, the Postgraduate Loan repayment threshold is GBP 21,000 and the rate is 6% of income above that. You repay nothing on the first GBP 21,000, then 6 pence in every pound above it. If you also have an undergraduate loan, you repay that separately at 9% above its own threshold at the same time.
How the Postgraduate Loan repayment works
The Postgraduate Loan, often shortened to PGL, covers master's and doctoral study in England and Wales. Its repayment mechanics are simpler than they first look. There is a single annual threshold and a single rate.
For the 2026/27 tax year the threshold is GBP 21,000 and the rate is 6%. Crucially, the 6% only applies to the portion of your income above GBP 21,000. The threshold is a floor that is ignored for repayment purposes, not a switch that taxes everything once you cross it.
So the formula is straightforward:
Annual repayment = (your income - GBP 21,000) x 6%
If your income is at or below GBP 21,000, your PGL repayment is zero.
What you pay at different salaries
Because repayments are charged only on income above GBP 21,000, the deduction rises gently with salary. The table below shows the annual and monthly PGL deduction at a range of gross salaries, using the 2026/27 threshold of GBP 21,000 and the 6% rate.
| Gross salary | Income above GBP 21,000 | PGL at 6% per year | Per month |
|---|---|---|---|
| GBP 21,000 | GBP 0 | GBP 0 | GBP 0 |
| GBP 26,000 | GBP 5,000 | GBP 300 | GBP 25 |
| GBP 31,000 | GBP 10,000 | GBP 600 | GBP 50 |
| GBP 35,000 | GBP 14,000 | GBP 840 | GBP 70 |
| GBP 45,000 | GBP 24,000 | GBP 1,440 | GBP 120 |
| GBP 55,000 | GBP 34,000 | GBP 2,040 | GBP 170 |
These figures are the PGL deduction only. They sit on top of Income Tax and National Insurance, and on top of any undergraduate loan repayment. To see your full net pay, run your salary through a take-home calculator that includes student loans.
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Open Student Loan calculatorHow the threshold is applied through PAYE
If you are employed, your PGL repayment is collected through PAYE, the same system that takes Income Tax and National Insurance. Your employer applies the threshold pro rata to each pay period, not as a single annual sum. The annual GBP 21,000 floor works out to roughly GBP 1,750 a month or about GBP 403 a week before any repayment is taken.
This pro rata approach has one consequence worth knowing. If you receive a large one-off payment in a single month -- a bonus, for example -- that month's gross pay may sit well above the monthly threshold even if your annual income would be below GBP 21,000. PAYE looks at the pay period in isolation, so a deduction can be taken in that month. Over the year this usually evens out, but it can surprise you on a single payslip.
Stacking with undergraduate loans
The Postgraduate Loan is a separate balance from any undergraduate loan you hold. The undergraduate plans for 2026/27 are:
| Plan | Threshold | Rate |
|---|---|---|
| Plan 1 | GBP 26,900 | 9% |
| Plan 2 | GBP 29,385 | 9% |
| Plan 5 | GBP 25,000 | 9% |
| Postgraduate Loan | GBP 21,000 | 6% |
If you hold both a PGL and an undergraduate loan, both deductions are calculated independently and both come out of your pay. Each uses its own threshold and its own rate.
Take someone on GBP 35,000 with a Plan 2 undergraduate loan and a Postgraduate Loan:
- Plan 2: 9% of (GBP 35,000 - GBP 29,385) = 9% of GBP 5,615 = about GBP 505 a year.
- PGL: 6% of (GBP 35,000 - GBP 21,000) = 6% of GBP 14,000 = GBP 840 a year.
That is roughly GBP 1,345 a year in combined student loan deductions, before any Income Tax or National Insurance. The two thresholds are different, so the same salary triggers a larger PGL deduction than the Plan 2 deduction in this example, simply because the PGL threshold is lower.
A Plan 2 undergraduate loan starts repaying at GBP 29,385 and takes 9% above it. The Postgraduate Loan starts repaying earlier, at GBP 21,000, but takes a lower 6%. Holding both means you cross the PGL threshold first and pay on a wider band of income for the PGL than for Plan 2.
Self-employed Postgraduate Loan repayments
If you are self-employed, your PGL repayment is collected through Self Assessment rather than PAYE. You declare your income, and HMRC calculates 6% of your taxable profits above GBP 21,000 alongside your Income Tax and National Insurance. The loan repayment is bundled into the same Self Assessment liability and is due with your tax bill.
This matters for budgeting. If you are used to PAYE smoothing deductions across twelve months, the Self Assessment route concentrates the loan repayment into your tax payment dates. Set money aside through the year so the combined bill does not catch you out. If you have both employment and self-employment income, repayments can be collected through both routes, with the Self Assessment calculation reconciling the total.
Interest and the write-off date
Postgraduate Loans accrue interest. The interest rate is set by the government and changes over time, so we do not quote a single figure here. Check your online student loans account or gov.uk for the current rate. Interest is added to your balance, which means repayments reduce both the principal and the future interest you would otherwise build up.
Repayments stop in one of two ways: the loan is cleared in full, or it is written off. The write-off period depends on the terms set when you took the loan out, and there is no single date that applies to everyone. Your online student loans account shows your specific write-off date. If you clear the balance early, deductions stop once the Student Loans Company confirms the loan is paid -- there can be a short lag, so it is worth checking your final payslips.
Should you overpay your Postgraduate Loan?
There is no penalty for making voluntary overpayments, and they reduce both your balance and the interest that accrues on it. But overpaying is not automatically the best use of spare cash. Because the loan is written off after a set period, some borrowers never repay the full balance through PAYE, in which case voluntary overpayments simply hand money to the loan that you might never have repaid otherwise.
Weigh an overpayment against alternatives such as paying into a pension, a Lifetime ISA, or higher-interest debt. The right answer depends on your salary trajectory, how close you are to your write-off date, and your wider financial goals. Model the numbers before committing. A compound interest calculator can show what the same money might do if invested instead.
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Open Take-Home Pay calculatorPutting it together
The Postgraduate Loan is one of the simpler parts of the UK deductions landscape: a GBP 21,000 threshold, a 6% rate, and a balance that is separate from any undergraduate loan. The complication comes from stacking. Once you layer the PGL on top of Income Tax, National Insurance and an undergraduate plan, your marginal deduction on each extra pound earned can climb quickly.
That is why the loan rate alone tells you little about your real take-home pay. The figure that matters is what lands in your account after every deduction. Run your salary, your loan plans and any pension contributions through a take-home calculator, and you will see the combined effect rather than guessing from individual rates.
For your specific balance, interest rate and write-off date, always check your online student loans account on gov.uk. The figures in this guide are the 2026/27 repayment threshold and rate; everything else about your loan is personal to your account.
Frequently asked questions
What is the Postgraduate Loan repayment threshold for 2026/27?
For the 2026/27 tax year, the Postgraduate Loan (PGL) repayment threshold is GBP 21,000 a year. You repay 6% of your income above that figure. If you earn at or below GBP 21,000 you repay nothing through PAYE in that period. The threshold is applied pro rata across the year, so it works out to roughly GBP 1,750 a month or about GBP 403 a week before any repayment is taken.
How much is the Postgraduate Loan repayment rate?
The Postgraduate Loan repayment rate is 6% of income above the GBP 21,000 threshold. That is higher than the 9% you might assume from undergraduate plans, but it applies to a different, smaller calculation base. You only pay 6% on the slice of income over GBP 21,000, not on your whole salary. So earning GBP 31,000 means 6% of GBP 10,000, which is GBP 600 a year, or GBP 50 a month.
Do I repay my Postgraduate Loan and undergraduate loan at the same time?
Yes. The Postgraduate Loan sits separately from Plan 1, Plan 2 or Plan 5 undergraduate loans. If you hold both, you repay 6% above GBP 21,000 for the PGL and 9% above your undergraduate plan threshold at the same time. The two deductions are calculated independently and both come out of your pay. This means you can be paying two student loan deductions in the same payslip.
Is the Postgraduate Loan repayment based on my total earnings or the amount above the threshold?
Only the amount above the threshold. The GBP 21,000 figure is a floor, not a trigger that taxes everything. If you earn GBP 26,000, your repayment is 6% of the GBP 5,000 above the threshold, which is GBP 300 a year. The first GBP 21,000 is ignored for repayment purposes. This is the same mechanism as undergraduate plans, just with a 6% rate and a GBP 21,000 floor.
What counts as income for Postgraduate Loan repayments?
Through PAYE, repayments are based on your gross pay in each pay period before tax but after pension contributions made through a net pay or salary sacrifice arrangement. For self-employed people, repayments are based on taxable profits assessed through Self Assessment. Bonuses, overtime and other taxable earnings count. Pay period spikes can trigger a one-off deduction even if your annual income would be below the threshold.
Will making Postgraduate Loan repayments affect my take-home pay a lot?
The 6% rate on income above GBP 21,000 is modest compared with Income Tax and National Insurance. On a GBP 35,000 salary the PGL deduction is GBP 840 a year, about GBP 70 a month. It does stack on top of tax and NI, so use a take-home calculator that includes the loan to see your true net figure. The combined marginal deduction matters more than the loan rate alone.
When do Postgraduate Loan repayments stop?
Repayments stop when the loan is cleared in full or when it is written off. The write-off period depends on the loan terms set when you took it out, which are not fixed by a single figure for everyone. Check your online student loans account for your specific write-off date. If you clear the balance before then, deductions stop once the Student Loans Company confirms the loan is paid. Always confirm with your account rather than guessing.
Do I pay interest on a Postgraduate Loan?
Yes, Postgraduate Loans accrue interest, and the interest rate is set by the government and changes over time rather than being a single fixed figure. Because the rate moves, we do not quote a specific percentage here -- check your online student loans account or gov.uk for the current rate. Interest is added to the balance, so making repayments reduces both the principal and the future interest you would otherwise accrue.
How do I check my Postgraduate Loan balance?
Log in to your online student loans account on gov.uk to see your current balance, the interest applied and your repayment history. Your employer also shows student loan deductions on your payslip, but the payslip only shows what was taken in that period, not the running balance. The online account is the single source of truth for your balance, write-off date and the type of plan you hold.
What happens to my Postgraduate Loan if I become self-employed?
If you are self-employed, Postgraduate Loan repayments are collected through Self Assessment rather than PAYE. You declare your income, and HMRC calculates 6% of your taxable profits above GBP 21,000 alongside your Income Tax and National Insurance. The repayment is then due with your tax bill. Keep this in mind when budgeting for your January payment, because the loan deduction is bundled into the same Self Assessment liability.
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