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🎓 Student Loan Repayment Calculator

UK Plan 1/2/4/5/9 income-contingent repayment, plus USA Federal Direct (Standard, Graduated, Extended, PSLF). Built from gov.uk and studentaid.gov rules.

Worked example

Tom finished a UK degree in 2024 on Plan 5 with a £45,000 balance. His starting salary is £30,000, growing 3% a year. Plan 5 charges 9% on every pound earned above the £25,000 threshold, with anything left written off 40 years after the first April after graduation.

In year one he earns £5,000 above the threshold, so his repayment is 9% × £5,000 = £450 — about £37.50 a month. Meanwhile interest accrues at RPI plus a margin (capped at 7.3% on the GOV.UK student loan rates page), adding roughly £3,200 to the balance. Year-one balance grows, not shrinks. By year 10 his salary is around £40,500, repayments rise to about £1,400 a year — still less than annual interest.

Run his salary curve out and total repayments over the 40 years come to roughly £52,000, with the remaining £80,000+ written off. The lever shift: any voluntary overpayment Tom makes is wasted, because he is never going to clear the loan. The same £200 a month into a Lifetime ISA or pension would be worth tens of thousands more by retirement.

Common mistakes

• UK overpaying when write-off is likely. Plan 2 and Plan 5 borrowers on typical graduate salaries rarely clear the balance before the 30- or 40-year write-off. Every voluntary overpayment is a straight transfer to the Treasury — better redirected into a pension, ISA or house deposit.
• Treating the UK loan as normal debt. It does not appear on credit files, does not affect mortgage applications beyond cash-flow impact, and disappears entirely on death. Treating it like a credit card means hoarding cash to clear it instead of investing — both psychologically and financially expensive.
• USA refinancing federal into private. Refinancing a Federal Direct loan to a private lender at a slightly lower rate kills access to IDR plans, PSLF, deferment and forbearance protections. Only refinance if you are confident you will pay on a standard 10-year schedule and would never use any federal flexibility.
• Missing PSLF certification. Public Service Loan Forgiveness needs annual employer certification through MOHELA. Borrowers who skip certification can find years of "qualifying" payments quietly disqualified at year ten — the most expensive paperwork mistake in US student lending.
• Not checking your Plan. Picking the wrong Plan in any UK calculator gives the wrong threshold, rate and write-off horizon. Log in to studentloanrepayment.co.uk before running numbers — Plan 2 vs Plan 5 alone changes the threshold by £3,470 and the write-off horizon by ten years.

UK Plan 1 vs Plan 2 vs Plan 4 vs Plan 5 — the full comparison

The UK student loan system has five concurrent plans because successive governments changed the deal without retiring the old terms. The plan you sit on depends entirely on where you started your course and when. Two people sitting next to each other in the same graduate role can be on completely different repayment regimes for the next three to four decades. The table below lays out the four undergraduate plans plus the postgraduate Plan 9 for the 2025/26 tax year (the Student Loans Company freezes these annually each April).

The structural change in Plan 5 is more punitive than the surface numbers suggest. Plan 2 graduates routinely never repay their loan — Department for Education figures put the proportion repaying in full at roughly 17% of cohorts. Plan 5's 40-year write-off horizon combined with the lower £25,000 threshold flips that ratio: official Government modelling at launch projected that more than half of Plan 5 graduates would repay the loan in full, often over thirty years of working life. The headline rate is still 9%, but the duration changes the lifetime cost dramatically.

Plan 5 deep dive — the 2023 reform that materially worsened the deal

Plan 5 applies to every English-domiciled undergraduate who started a course on or after 1 August 2023. Three changes vs Plan 2 stack against the borrower:

1. Lower threshold. £25,000 vs Plan 2's £28,470 means repayments start sooner. The threshold is frozen in cash terms until April 2027, so real-terms inflation drags more graduates into repayment every year.
2. Longer write-off. 40 years vs Plan 2's 30 years. A 21-year-old graduating in 2027 will not see their Plan 5 loan written off until their 65th birthday — effectively the whole working career.
3. Interest simplification. Plan 5 interest is RPI only, with no income-linked uplift. That sounds cheaper than Plan 2's RPI + 0-3%, but the combined effect of the longer term and lower threshold more than offsets the modest interest reduction.

Worked example, £45,000 loan, £35,000 starting salary, 3% annual salary growth, 7.3% interest:

• Plan 5 (40 years). Year 1 repayment = (£35,000 − £25,000) × 9% = £900. Year 10 salary ≈ £45,667, repayment ≈ £1,860. Total repaid over 40 years ≈ £147,500 with about £251,000 written off — but the borrower has paid back more than three times the original principal.
• Plan 2 (30 years), same inputs. Year 1 repayment = (£35,000 − £28,470) × 9% = £588. Year 10 ≈ £1,548. Total repaid over 30 years ≈ £73,000 with about £199,000 written off.

For the typical £35k mid-career graduate on Plan 5, the longer term means paying back roughly twice as much in cash as the same graduate would on Plan 2, despite the £3,470 lower threshold sounding marginal. The lever that moved is the 40-year clock, not the headline rate.

UK lifetime repayment scenarios — three salary paths

The table below compares total lifetime cost for three salary paths, both on Plan 2 (the 2012–2023 cohort) and Plan 5 (post-Aug-2023 cohort). All scenarios use a £45,000 starting balance, 3% annual salary growth and 7.3% nominal interest — broadly the maximum prevailing rate on the GOV.UK Plan 2/5 interest table.

The pattern is striking. Low-earning graduates pay back two and a half times more under Plan 5 than under Plan 2, simply because the 40-year clock keeps running while the 30-year clock would have stopped. Mid-earning graduates flip from substantial write-off under Plan 2 to fully clearing under Plan 5 — Plan 5 turns the loan from a graduate tax back into a real debt. High earners clear the loan well before the write-off horizon on both plans, but Plan 5 actually clears slightly faster because the lower threshold front-loads repayments. The £75k case is the only one where Plan 5 borrowers don't lose out.

US Federal Direct loans — Subsidised, Unsubsidised, PLUS

The US federal system runs three Direct Loan products under the William D. Ford programme. All three are fixed-rate, fixed-term amortising loans — they behave like a normal mortgage rather than a graduate tax. The rate is set on 1 July each year, anchored to the 10-year Treasury auction plus a statutory add-on.

• Direct Subsidised (undergrad). 6.53% for 2024-25 disbursements. The Department of Education pays interest while the student is enrolled at least half-time, during the six-month grace period after leaving school, and during qualifying deferment. Annual cap is $3,500 in year one, rising to $5,500 in year three. Lifetime cap $23,000.
• Direct Unsubsidised (undergrad and graduate). 6.53% for undergrads, 8.08% for graduates. Interest accrues from day one of disbursement — students who don't service it during school see capitalised interest swell the principal at graduation. Undergrad cap $5,500-$7,500/year, grad cap $20,500/year.
• Direct PLUS (graduate students and parents). 9.08% for 2024-25, plus a 4.228% origination fee deducted at disbursement (so a $10,000 PLUS loan delivers $9,577 in tuition). Credit check required. No lifetime borrowing cap beyond the full cost of attendance.

Worked example, $30,000 undergrad balance, Standard 10-year, 6.53% rate. Using the standard amortisation formula M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1) with r = 0.0653/12 = 0.005442 and n = 120, the monthly payment works out to $341. Total cost over the full term = $40,932, of which $10,932 is interest. .

Same $30,000 balance on Extended Repayment (25 years), same 6.53% rate. Monthly drops to $203 but lifetime cost balloons. Total = $60,937, of which interest is $30,937 — nearly tripling the interest cost vs Standard 10-year.

$30,000 graduate PLUS loan at 9.08%, Standard 10-year. Monthly = $381. Total = $45,760, of which $15,759 is interest — and that ignores the ~$1,268 origination fee deducted at disbursement, which means the borrower received only ~$28,732 in cash but repays as if the full $30,000 was advanced.

PSLF and Income-Driven Repayment — the US forgiveness routes

Two federal mechanisms can shrink the lifetime cost of a US Direct loan to well below the headline amortisation: Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF). Both are politically contested, both have moving rules, and both are administratively heavy.

Public Service Loan Forgiveness (PSLF). Established by the College Cost Reduction and Access Act 2007. After 120 qualifying monthly payments (10 years equivalent) made while working full-time for a government or registered 501(c)(3) employer, the remaining federal Direct Loan balance is cancelled. The forgiven amount is not subject to federal income tax. Eligibility requires the borrower to be on a qualifying repayment plan (any IDR, plus Standard 10-year) and to file the PSLF Form (employer certification) annually through the loan servicer MOHELA. The Biden-era PSLF Limited Waiver (2021-22) and the IDR Account Adjustment (2022-24) retroactively credited months that had previously been disqualified on technicalities, putting tens of thousands of borrowers across the finish line. The mechanic itself remains in statute as of 2026, though periodic reform attempts continue.

Income-Driven Repayment (IDR). Four named plans — IBR, PAYE, SAVE, and the older ICR — cap monthly payments at between 5% and 20% of "discretionary income" (income minus 150% to 225% of the federal poverty guideline), with forgiveness of any remaining balance after 20 or 25 years. SAVE, introduced under the Biden administration in 2023, was the most generous version (5% of discretionary income for undergrad debt, interest subsidy on the unpaid portion) but has been in litigation limbo since mid-2024 — new enrolments and the most beneficial provisions are paused pending Court of Appeals rulings. PAYE and IBR remain available and operational. Borrowers pursuing PSLF must be on an IDR plan to maximise forgiveness, since Standard 10-year pays the loan off before PSLF ever activates.

Refinancing trade-off. Private lenders advertise rates below 6.53% — often 4-5% for top credit profiles. Refinancing a federal loan into a private one permanently severs eligibility for IDR, PSLF, federal forbearance, and death/disability discharge. Refinance only if (a) the borrower has stable high income, (b) is certain they'll never pursue PSLF, and (c) the rate differential clears at least 1.5 percentage points to justify the lost optionality.

South Africa NSFAS and the private student loan market

South Africa's National Student Financial Aid Scheme (NSFAS) is structurally different from both the UK and US models. Since the 2018 fee-free reform under President Cyril Ramaphosa, NSFAS funding for students from households earning under R350,000 per year is a non-repayable bursary, not a loan. The bursary covers tuition, accommodation, learning materials, and a living allowance at registered TVET colleges and public universities. There is no interest, no repayment schedule, and no write-off horizon — because nothing is owed.

Two legacy categories still carry repayment obligations:

• Pre-2018 NSFAS loans. Borrowers who studied before the 2018 bursary reform retain their original loan terms. Repayments scale by income — from 3% of salary at the lowest income band (starting at R30,000/year) up to 8% at higher bands. No new interest accrues on these loans following a 2018 policy decision, but principal repayment is still tracked through SARS via PAYE. Most pre-2018 borrowers will fully repay over 15 to 25 years depending on career path.
• The "missing middle" gap. Households earning between R350,000 and R600,000 — too rich for NSFAS but too poor to pay full tuition — sit in a politically contested gap. A 2024 "Comprehensive Student Funding Model" proposal would extend partial loans into this band, but as of 2026 the gap is mostly filled by private bank student loans.

Private SA student loans. The major banks (Standard Bank, Absa, FNB, Nedbank) offer student credit at prime + a margin, typically prime + 1% to +3%. With the South African Reserve Bank prime rate sitting near 11.75% in 2026, that puts effective rates in the 12.75%-14.75% range — materially more expensive than UK or US federal alternatives. Repayment usually starts on graduation with no income contingency: missed payments hit credit records and trigger collections like any other consumer loan. Parents are often required to sign as guarantors.

Practical implication for SA graduates. A South African student weighing whether to take an NSFAS bursary or a private bank loan should always prefer NSFAS where eligible — the cash difference compounds rapidly at SA prime rates. For a R150,000 three-year private loan at 13.75%, interest accrues to roughly R20,000 in the first year alone, before any repayment begins. The same student on NSFAS post-2018 incurs zero financing cost and starts their career debt-free, materially improving early-career savings capacity and ability to fund subsequent qualifications such as a Master's or CA articles. The "missing middle" households earning R350,000-R600,000 face the worst position in the system, since they qualify neither for the bursary nor for affordable government-backed credit.

The compounding trap — when UK Plan 2/5 balances grow during repayment

A counter-intuitive feature of UK income-contingent loans: most graduates see their nominal balance grow during the first five to ten years of repayment, even while making the legally required monthly payments. The math is straightforward. A Plan 5 borrower earning £35,000 pays £900 in year one against a £45,000 balance at 7.3% interest — interest charged that year is £3,285. The balance ends the year at £47,385, not £44,100.

This compounds the psychological problem. Borrowers see their statement balance climbing despite years of payroll deductions and conclude they're "getting nowhere". The mathematical reality is that under income-contingent rules, the balance is largely irrelevant — what matters is the 9% above-threshold tax for 30 or 40 years, after which any remainder evaporates. The Money Saving Expert framing — "treat it as a graduate tax, not a debt" — is the right mental model. The statement balance is a distraction unless you're a top-decile earner heading toward full repayment.

When to repay early — and when absolutely not to

Voluntary overpayments are a different question for each plan. Three rules of thumb:

• Plan 5: almost never worth overpaying. The 40-year horizon means most middle-earning borrowers will pay substantial sums but with a real interest cost capped at RPI (no income uplift). Any voluntary overpayment goes straight to reducing the write-off pile, not the lifetime cash cost — unless you're confident you'll fully repay (typically requires sustained £70k+ earnings from day one).
• Plan 2: worth overpaying only for very high earners. A graduate earning £75k+ from year one will clear Plan 2 around year 14 of repayment regardless. For everyone else, the same write-off math applies as Plan 5 — overpayments are a transfer to the Treasury.
• Plan 1 and Plan 4: thresholds are lower, write-off is sooner (25 years for Plan 1). More graduates clear these naturally; modest overpayments can save real interest for those on track to fully repay. Run the calculator above with your actual salary trajectory before committing extra cash.
• US Direct loans (any plan): standard debt-prioritisation math. If your loan rate exceeds your expected long-run investment return (typically 6-7% real for diversified equities), overpay. If you're pursuing PSLF, never overpay — every extra dollar reduces the eventual forgiven amount.

The UK marginal-tax-rate framing

UK Plan 2 and Plan 5 repayments don't appear on a payslip as a tax, but they behave like one. For a higher-rate graduate earning over £50,270 on Plan 2 or 5, the marginal deduction on each extra pound earned is:

• 40% higher-rate income tax
• 2% employee National Insurance (above the upper earnings limit)
• 9% student loan deduction
• Total = 51% effective marginal rate

Between £100,000 and £125,140 the personal allowance taper adds another 20 percentage points (the so-called "60% trap"), pushing the marginal rate to 71% including loan deductions. For comparison, the equivalent US graduate at the top of the federal Single bracket (37% above $626,350 in 2025) plus a typical state income tax of 5-7% lands at 42-44% — meaningfully lower than UK higher-rate plus loan. This is the single most under-discussed feature of the UK Plan 5 reform: it builds a 51% marginal rate into the standard graduate-professional pay scale starting at the higher-rate threshold.

The practical implication: salary sacrifice into a workplace pension is exceptionally powerful for UK graduates carrying Plan 2 or Plan 5. Every £100 sacrificed into pension avoids 40% income tax, 2% NI, and 9% loan = £51 in immediate take-home reduction. The full £100 lands in the pension. Few financial moves match that effective return.