Plan 2 vs Plan 5 Student Loan Repayments
Examples reviewed 15 September 2026. Calculated from the same engines used by the linked tools.
Your funding body and course dates determine your plan. This comparison explains their effect; it does not suggest you can switch plans. Confirm your plan and cancellation date with the Student Loans Company.
Same salary and balance
Both examples start with GBP35,000 annual salary and GBP45,000 outstanding, with zero salary growth and the first repayment April just passed. The projection holds current thresholds and interest rules constant.
| Measure | Plan 2 | Plan 5 |
|---|---|---|
| Annual income threshold | £29,385.00 | £25,000.00 |
| First-year repayment | £505.35 | £900.00 |
| Monthly average | £42.11 | £75.00 |
| Current scenario interest rate | 4.82% | 4.10% |
| Assumed remaining cancellation horizon | 30 years | 40 years |
Repayments and interest answer different questions
The threshold sets income-linked payments, while interest affects the balance and whether it clears before cancellation. Payroll uses pay-period thresholds and rounding, so an annual average can differ from a payslip. Future rates, policy and earnings are uncertain.
GOV.UK repayment thresholds and current interest; cancellation rules.
What the plan actually changes for a graduate
Plan 5 has the lower repayment threshold, so payments start at a lower salary and are higher at any given income, and it runs for longer before cancellation; Plan 2 starts later and is written off sooner. For a graduate on a modest salary that never rises far above the threshold, Plan 5 usually means paying more in total over a working life, because the extra years outweigh the lower interest rate. For a high earner who would clear the balance either way, the interest rule matters more than the threshold and Plan 2 can cost more. Nobody chooses between the two; the plan is fixed by when and where you started your course, which is why this comparison exists to explain a payslip rather than to inform a decision. Overpaying is the one lever a borrower controls, and it only pays for people likely to clear the loan before cancellation; the calculator shows whether that is you.
Project your own student loan, including salary growth and a confirmed cancellation horizon.