Student Loan Plan 1 and Plan 4 Guide 2026/27

Who Is on Plan 1 or Plan 4

• Plan 1: most England and Wales students who started an undergraduate course before September 2012, plus all Northern Ireland undergraduate borrowers regardless of start date
• Plan 4: Scottish undergraduate students, regardless of when their course started
• Your plan type is fixed by where you were living and when your course started, and is shown on your Student Loans Company account and PAYE deduction records

Thresholds and Repayment Rate

Both plans repay at 9% of income above their threshold, deducted automatically by an employer through PAYE for employees, or calculated through Self Assessment for the self-employed.

• Plan 1 threshold 2026/27: £26,900 a year (£2,241 a month / £517 a week)
• Plan 4 threshold 2026/27: £33,795 a year (£2,816 a month / £649 a week)
• Repayments are 9% of everything earned above the threshold, not 9% of total income

Interest Rates

Plan 1 and Plan 4 loans both charge interest at the lower of the Bank of England base rate plus 1%, or the Retail Prices Index (RPI) rate — whichever produces the lower figure. This is a notably more favourable interest regime than Plan 2, where the rate can rise as high as RPI plus 3% depending on income, which is one reason Plan 1 and Plan 4 balances tend to grow more slowly than equivalent Plan 2 balances.

Write-Off Rules

• Plan 1: written off 25 years after the April you were first due to start repaying (or at age 65 for loans taken out before 2006, under the older rules that still apply to some very early borrowers)
• Plan 4: written off 30 years after the April you were first due to start repaying
• Any outstanding balance at the write-off point is cancelled automatically, with nothing further owed

How This Differs From Plan 2 and Plan 5

See our Plan 2 and Plan 5 guide for full detail on the newer loan plans, but the key differences are the threshold amount (Plan 2 and Plan 5 have lower thresholds), the write-off period (30 years for Plan 2, 40 years for Plan 5), and generally higher interest rates for Plan 2 borrowers while studying and shortly after.

Worked Example

Fiona, who studied in Scotland and is on Plan 4, earns £42,000 a year in 2026/27. Her repayment is 9% of the amount above her £33,795 threshold: £42,000 minus £33,795 equals £8,205, and 9% of that is £738.45 a year, or roughly £61.54 a month, deducted automatically through PAYE alongside her Income Tax and National Insurance.

Her colleague Tom, who studied in England before 2012 and is on Plan 1, earns the same £42,000. His repayment uses the lower £26,900 threshold: £42,000 minus £26,900 equals £15,100, and 9% of that is £1,359 a year, or £113.25 a month — noticeably more than Fiona pays on the same salary, because his threshold is lower.

Common Pitfalls

• Not knowing your plan type. Confusing Plan 1 with Plan 2 leads to under- or overestimating repayments, since the thresholds differ by more than £2,000 a year.
• Assuming Scotland uses Plan 1. Scottish borrowers are on Plan 4 with its own threshold, not Plan 1 or Plan 2, regardless of when they studied.
• Overpaying close to write-off. Voluntarily overpaying a loan that would be written off within a few years anyway can mean paying money that would otherwise have been cancelled.
• Forgetting a Postgraduate Loan runs alongside. If you also have a Postgraduate Loan, it is repaid separately at 6% above its own threshold, on top of any Plan 1 or Plan 4 deduction.
• Missing a change of employer update. Make sure a new employer has your correct plan type on file, since an incorrect plan can lead to under- or over-deduction until corrected.