Frequently Asked Questions
What is the UK student loan threshold for Plan 2?
For 2026, Plan 2 borrowers repay 9% of every pound earned above £28,470 per year. Anything below the threshold means zero repayment that month. Any balance left after 30 years from the first April after course completion is written off.
What is Plan 5 and who is on it?
Plan 5 is for English students starting university from 1 August 2023. The threshold is £25,000 (lower than Plan 2), the rate is still 9%, but the write-off period is extended to 40 years. Most Plan 5 borrowers will pay back significantly more total interest than Plan 2 borrowers.
How does PSLF (Public Service Loan Forgiveness) work?
PSLF cancels the remaining balance on US Federal Direct loans after you make 120 qualifying monthly payments while working full-time for a qualifying public-service employer. The forgiven amount is not taxed federally. This calculator caps the schedule at 120 payments and treats the remainder as forgiven.
Should I make extra student loan payments?
USA Federal: yes if your interest rate exceeds your expected investment return, and only after maxing employer 401(k) match and any high-interest credit card debt. UK income-contingent: rarely worth it — extra payments only help if you would otherwise pay back the full loan before write-off, which only happens for high earners on Plan 1, 2, or 4.
What's the difference between UK and USA student loans?
UK student loans are income-contingent (you only pay above a salary threshold, and the balance is written off after 25 to 40 years) — they behave more like a graduate tax. USA Federal Direct loans are amortising — you pay a fixed schedule until paid off, with PSLF as the only mainstream forgiveness route.