Pillar Guide · Updated July 2026
UK Postgraduate Loan Repayment: A Practical Guide for 2026/27
A Postgraduate Loan funds a taught or research master's degree (and some postgraduate doctoral study) and is repaid on different terms from an undergraduate student loan. This pillar guide explains the frozen £21,000 repayment threshold, the 6% repayment rate, how repayments work if you also owe an undergraduate Plan 1, 2, 4 or 5 loan, the RPI+3% interest rate, and the 30-year write-off.
What Is a Postgraduate Loan
A Postgraduate Loan (PGL) is a government-backed loan from the Student Loans Company that helps cover tuition fees and living costs for a taught or research master's degree, and in some cases postgraduate doctoral study, in England. It is a separate loan product from undergraduate Plan 1, 2, 4 and 5 loans, with its own threshold, repayment rate and write-off period, even though it is often taken by borrowers who already have an undergraduate student loan outstanding.
Eligibility is not means-tested on household income in the way some other student support is, and the loan is paid directly toward tuition fees with the remainder released to the student for living costs, similar in structure to the undergraduate maintenance loan system.
Scotland, Wales and Northern Ireland operate broadly similar but separately administered postgraduate loan schemes with their own terms — this guide focuses on the England Postgraduate Loan administered by the Student Loans Company.
The £21,000 Threshold and 6% Rate
You start repaying a Postgraduate Loan once your income exceeds £21,000 a year (£1,750 a month, £403 a week) for 2026/27. Above this threshold, 6% of your income is deducted, calculated on the same slice-above-threshold basis as undergraduate loans — you only pay 6% of the amount over £21,000, not 6% of your whole salary.
Unlike Plan 2, the £21,000 threshold has remained frozen since the Postgraduate Loan was introduced and does not automatically rise each year with average earnings. As salaries grow over time through inflation and career progression, more income falls above the frozen threshold, gradually increasing the effective repayment burden for a given real level of earnings.
Repaying Two Loans at Once
Many postgraduate borrowers also owe an undergraduate loan from a first degree. The two loans are repaid independently and simultaneously, each calculated against its own threshold and rate, then combined into a single total deduction from pay:
| Plan | Threshold | Rate |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate Loan | £21,000 | 6% |
For example, a graduate on Plan 2 earning £35,000 with a Postgraduate Loan also outstanding would repay 9% of the amount above £29,385 (9% of £5,615 = £505.35 a year) from the undergraduate loan, plus 6% of the amount above £21,000 (6% of £14,000 = £840 a year) from the Postgraduate Loan — a combined £1,345.35 a year, or roughly £112 a month, split between the two loans on the payslip.
Interest on a Postgraduate Loan
Interest accrues on a Postgraduate Loan at RPI plus 3% from the date each instalment is paid out, both during study and throughout the repayment period. This is a flat additional rate on top of RPI rather than the income-scaled rate structure historically used for some undergraduate plans, meaning the interest charged does not reduce simply because your income is close to the threshold.
Because the 6% repayment rate on a relatively low threshold can be modest relative to the interest accruing, particularly in the years soon after graduating when salaries have not yet grown much, many Postgraduate Loan balances increase in the early years of repayment before beginning to reduce, similar in pattern to how undergraduate Plan 2 balances have historically behaved for lower and middle earners.
How Repayments Are Collected
Employed borrowers have Postgraduate Loan repayments deducted automatically through PAYE, in the same pay run as Income Tax, National Insurance and any undergraduate student loan repayment. You declare the loan on your new starter checklist (or your employer identifies it from HMRC data) so the correct deduction begins from your first eligible payday, without needing to apply separately each tax year.
Self-employed borrowers report their Postgraduate Loan alongside any undergraduate loan through the Self Assessment tax return, with the repayment calculated on total profits for the tax year and paid alongside the Self Assessment tax bill, typically by 31 January following the end of the tax year.
Voluntary Overpayments
Borrowers can make voluntary payments directly to the Student Loans Company at any time, on top of the automatic payroll or Self Assessment deductions, reducing the outstanding balance and the interest that continues to accrue on it. Given the RPI+3% interest rate, overpaying can meaningfully cut the total cost for borrowers who are confident they will clear the loan in full before the 30-year write-off.
For borrowers who are unlikely to repay the loan in full within 30 years based on their expected career earnings, voluntary overpayment provides no net financial benefit, since any balance remaining at the write-off point is cancelled regardless of how much has been repaid. A careful projection of likely lifetime earnings is worth doing before committing to significant voluntary overpayments.
The 30-Year Write-Off
A Postgraduate Loan is written off 30 years after the April you were first due to begin repayment, regardless of the outstanding balance at that point — the same 30-year period that applies to Plan 2 loans taken out before August 2023. This is shorter than the 40-year write-off period that applies to Plan 5 undergraduate loans for students starting university from August 2023 onward.
Because the 6% rate on a frozen, comparatively low threshold often does not clear the balance for borrowers on moderate incomes, a significant proportion of Postgraduate Loan debt is expected to be written off unpaid after 30 years — in practice functioning similarly to a time-limited additional income tax for many borrowers rather than a debt that is fully repaid.
Effect on Mortgage Affordability
Mortgage lenders treat ongoing student loan deductions, including a Postgraduate Loan repayment, as a regular monthly commitment when assessing how much you can afford to borrow, since it reduces net disposable income available for mortgage payments. Borrowers with both an undergraduate loan and a Postgraduate Loan running concurrently have a larger combined deduction, which can modestly reduce the maximum loan a lender is willing to offer.
In most affordability assessments, income level, existing non-student debt, credit history and outgoings such as childcare or other loan repayments have a larger effect on the final lending decision than student loan deductions alone, but it remains a relevant factor lenders take into account.