Independent briefing · 5 minute read
Plan 2 vs Plan 5 student loans
Two English graduates, same balance, same salary, very different outcomes. What actually separates Plan 2 and Plan 5.
Editorial record
- Last reviewed
- 7 August 2026
- Purpose
- General information, independently produced
01
What is the difference between Plan 2 and Plan 5 student loans?
This is the sharpest divide in English student finance. Two graduates can hold almost identical balances, earn identical salaries, and repay wildly different amounts, purely because one started university before August 2023 and the other after. Plan 5 has a lower threshold, so repayments start earlier and on more of your income, but Plan 2 charges interest above inflation while Plan 5 does not.
02
The rules side by side
| Plan 2 | Plan 5 | |
|---|---|---|
| Repayment threshold | £29,385 a year | £25,000 a year |
| Repayment rate above the threshold | 9% | 9% |
| Interest | RPI up to RPI plus 3%, rising with income, currently capped at 6% | RPI only, with no premium above inflation |
| Written off after | 30 years | 40 years |
| Who it applies to | Started uni September 2012 onwards (England: up to July 2023) | England · started uni August 2023 onwards |
Thresholds and rates are the verified 2026/27 figures used throughout this site. Every one is listed with its official source on the sources page.
03
What each plan costs on a £45,000 balance
These figures are produced by the same engine that powers the calculator, run for both plans at identical salaries and an identical starting balance, so the only thing that differs is the plan itself.
| Salary | Plan 2 monthly | Plan 2 outcome | Plan 5 monthly | Plan 5 outcome |
|---|---|---|---|---|
| £25,000 | £0 | £150,521 written off | £0 | £226,649 written off |
| £30,000 | £5 | £150,826 written off | £38 | £182,344 written off |
| £35,000 | £42 | £152,989 written off | £75 | £138,039 written off |
| £45,000 | £117 | £149,543 written off | £150 | £49,430 written off |
| £60,000 | £230 | £40,530 written off | £263 | Clears in 21 years and 7 months |
Assumptions: a £45,000 starting balance, a salary held constant so that the plan rules are the only variable, and interest held at the verified snapshot. Real salaries rise, which shortens the picture for higher earners. Use the calculator to model your own balance, salary and pay growth.
04
The bottom line
Plan 5 usually costs more in total for middle earners, because the lower threshold plus a forty-year term means far more of a working life spent repaying. Plan 2 looks harsher on paper because of its interest rate, but its higher threshold and shorter term mean many borrowers repay less before the balance is cancelled.
Neither plan is something you choose. Your plan is set by where and when you were funded, so the practical value of knowing the difference is understanding whether your balance is likely to be cleared or cancelled, which is what determines whether paying extra makes any sense at all.
05
Which plan am I on?
Plan 2: English students who started an undergraduate course between September 2012 and July 2023, and Welsh students who started on or after September 2012 (Wales has no Plan 5).
Plan 5: English students who started an undergraduate course from August 2023 onwards.
Your funding body decides your plan, not where you now live or work. Our which plan am I on guide works it out from your funding body and course start year. Your online repayment account with the Student Loans Company states the plan the Student Loans Company has you on, and GOV.UK explains how plans are assigned.
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This is general information, not financial advice. Check GOV.UK for the official rules that apply to your circumstances.