Comparison · Student Loans · 2026/27
Postgraduate Loan vs Plan 2 Student Loan UK 2026/27: Thresholds and Combined Repayments
A Postgraduate Loan has a much lower repayment threshold and lower rate than a Plan 2 undergraduate loan — but the two are calculated independently, so a graduate repaying both at once pays more in total than either loan alone. Here is how they compare for 2026/27.
TL;DR - 30-Second Summary
- - Postgraduate Loan: £21,000 threshold, 6% rate, 30-year write-off
- - Plan 2: £29,385 threshold, 9% rate, 30-year write-off
- - Both at once: each loan is calculated independently and deducted together — the two thresholds do not combine
Side by Side: Postgraduate Loan vs Plan 2
| Feature | Postgraduate Loan | Plan 2 |
|---|---|---|
| Repayment threshold 2026/27 | £21,000 | £29,385 |
| Repayment rate above threshold | 6% | 9% |
| Write-off period | 30 years after first due to repay | 30 years after first due to repay |
| Funds | Master's or Doctoral course fees and living costs | Undergraduate degree fees and living costs |
Worked Example: £35,000 Salary, Repaying Both Loans
Suppose a graduate earns £35,000a year and is repaying both a Postgraduate Loan and a Plan 2 loan. Each loan's repayment is calculated separately against the full salary.
| Loan | Income above threshold | Rate | Annual repayment |
|---|---|---|---|
| Postgraduate Loan | £14,000 | 6% | £840 |
| Plan 2 | £5,615 | 9% | £505 |
| Combined total | — | — | £1,345 |
That is a combined £1,345 a year, or about £112 a month, deducted between the two loans on a £35,000 salary — noticeably more than either loan deducts on its own, because the lower Postgraduate Loan threshold catches income that Plan 2 alone would not yet touch.
Postgraduate Loan vs Plan 2 — Frequently Asked Questions
What is a Postgraduate Loan and who repays it?
The Postgraduate Loan (PGL) helps fund a Master's degree or, separately, a Doctoral course, and is repaid at a lower rate and lower threshold than undergraduate loans. For 2026/27, the threshold is £21,000 and the rate is 6% of income above that threshold.
Can I be repaying a Postgraduate Loan and a Plan 2 loan at the same time?
Yes — this is common for anyone who did an undergraduate degree under Plan 2 rules (started between September 2012 and July 2023) and then took out a Postgraduate Loan for a Master's or doctorate. HMRC calculates the repayment due under each loan separately using each loan's own threshold and rate, then deducts the combined total through PAYE or Self Assessment.
Do the Postgraduate Loan and Plan 2 thresholds add together?
No. Each loan applies its own threshold to your total income independently. So on a £35,000 salary, the Postgraduate Loan charges 6% on the amount above £21,000, and Plan 2 separately charges 9% on the amount above £29,385 — the two calculations do not interact or reduce each other.
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Which loan is paid off first if I am repaying both?
Neither loan is "paid off first" in the sense of priority — both are repaid simultaneously each pay period, each based on its own threshold and rate, with HMRC allocating the correct portion of your combined deduction to each loan balance. There is no option to pause one loan while repaying the other faster through the standard payroll deduction system, though voluntary overpayments can be directed to a specific loan via the Student Loans Company.
When is a Postgraduate Loan written off?
A Postgraduate Loan is written off 30 years after the April you were first due to start repaying, the same write-off period as Plan 2. If you are repaying both a Postgraduate Loan and a Plan 2 loan, both are on a 30-year write-off clock, though they may have started at different times if you finished your undergraduate degree before starting your postgraduate course.
Is it worth overpaying a Postgraduate Loan or Plan 2 loan early?
This depends on your income trajectory and interest rate. Many graduates with lower or middle incomes never fully repay Plan 2 or Postgraduate Loans before the 30-year write-off, because interest accrues on the balance faster than it is repaid at typical salaries — in that situation, voluntary overpayments can be a poor use of money compared with pension contributions or an ISA, since the loan may be written off regardless. Higher earners who are on track to fully repay before year 30 are more likely to benefit from overpaying, since it reduces the total interest paid over the loan's life.
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Disclaimer: This is general information, not financial advice. Your exact loan mix, thresholds and interest rates depend on your individual circumstances — check your Student Loans Company account for confirmation. See gov.uk guidance on student loan repayment plans.
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