How Student Loan Repayments Work for NHS Staff
Student loan repayments are deducted automatically through PAYE — you don't need to set up a direct debit or contact the Student Loans Company. Your NHS trust's payroll department handles everything based on the start notice they receive from HMRC.
You only repay when you earn above your plan's threshold. The repayment is 9% of earnings above the threshold for undergraduate loans (Plans 1, 2, 4 and 5) or 6% above the threshold for Postgraduate Loans. If you have both an undergraduate and postgraduate loan, both are deducted at the same time.
Student Loans Are Based on Gross Pay
Your student loan repayment is calculated on your gross salary before pension contributions — not on your taxable income. This is different from income tax, where NHS pension contributions reduce your tax bill. Opting into the NHS pension saves you tax but does not reduce your student loan repayment.
However, salary sacrifice arrangements (such as cycle-to-work or lease car schemes) do reduce your gross pay before student loan calculations, which means they genuinely lower your student loan repayment.
Which Student Loan Plan Am I On?
Your plan depends on when and where you studied:
- •Plan 1 — England or Wales, started before 1 September 2012
- •Plan 2 — England or Wales, started between 1 September 2012 and 31 July 2023
- •Plan 4 — Scotland (any start date, funded by SAAS)
- •Plan 5 — England, started on or after 1 August 2023
- •Postgraduate Loan — Master's loan from August 2016, or Doctoral loan from August 2018
If you're unsure, check your payslip for the student loan deduction type, or log in to your Student Loans Company account.
2026/27 Repayment Thresholds
| Plan | Annual Threshold | Monthly Threshold | Rate |
|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | 9% |
| Plan 2 | £29,385 | £2,448 | 9% |
| Plan 4 | £33,795 | £2,816 | 9% |
| Plan 5 | £25,000 | £2,083 | 9% |
| Postgraduate | £21,000 | £1,750 | 6% |
When Is My Student Loan Written Off?
Your loan is cancelled automatically — you don't need to apply:
- •Plan 1 — 25 years after the April you were first due to repay (loans taken from September 2006). Loans taken before September 2006 are cancelled at age 65.
- •Plan 2 — 30 years after the April you were first due to repay
- •Plan 4 — 30 years after the April you were first due to repay (loans from August 2007). Earlier loans are cancelled at age 65 or after 30 years, whichever comes first.
- •Plan 5 — 40 years after the April you were first due to repay
- •Postgraduate Loan — 30 years after the April you were first due to repay
How Does Moving Up a Band Affect My Student Loan?
When you move from one band to the next — say Band 5 to Band 6 — your gross salary increases, which means your student loan repayment goes up too. At 9% of earnings above the threshold, every extra £1,000 in salary adds roughly £7.50 per month to your student loan deduction.
Use the calculator above to compare different bands and see the exact impact on your take-home pay.
Do Unsocial Hours and Overtime Affect Repayments?
Yes. Unsocial hours enhancements, overtime, and any other payments that increase your gross pay in a given month will increase your student loan deduction for that month. This is because PAYE student loan deductions are calculated on your total gross earnings each pay period.
If you work regular nights or weekends, your average monthly student loan repayment will be higher than someone on the same band working standard hours.
Student Loan Repayments During Maternity Leave
During maternity leave, your student loan repayments adjust automatically based on your reduced pay. During the unpaid period (weeks 40–52), no student loan deduction is taken. When you return to full pay, repayments resume at the normal rate.