Student loan interest rates 2026/27
Interest is added to a student loan every month, whether or not the borrower is repaying. The table below gives the rate for each plan and the dates it covers. Rates are usually reset each September, part way through the tax year, so one plan can have two rows for 2026/27.
| Plan | Period | Interest rate |
|---|---|---|
| Plan 1 | 6 April 2026 to 31 August 2026 | 3.2% |
| Plan 2 (variable) | 6 April 2026 to 31 August 2026 | 3.2% to 6.2% |
| Plan 4 | 6 April 2026 to 31 August 2026 | 3.2% |
| Plan 5 | 6 April 2026 to 31 August 2026 | 3.2% |
| Postgraduate loan (Plan 3) | 6 April 2026 to 31 August 2026 | 6.2% |
| Plan 1 | 1 September 2026 to 5 April 2027 | 4.1% |
| Plan 2 (variable) | 1 September 2026 to 5 April 2027 | 4.1% to 6% |
| Plan 4 | 1 September 2026 to 5 April 2027 | 4.1% |
| Plan 5 | 1 September 2026 to 5 April 2027 | 4.1% |
| Postgraduate loan (Plan 3) | 1 September 2026 to 5 April 2027 | 6% |
Source: www.gov.uk/government/news/student-loans-interest-rates-and-repayment-threshold-announcement--6, checked 23 September 2026; www.gov.uk/guidance/how-interest-is-calculated-plan-4, checked 23 September 2026; www.gov.uk/government/news/student-loans-interest-rates-and-repayment-threshold-announcement--7, checked 23 September 2026; www.gov.uk/repaying-your-student-loan/what-you-pay, checked 23 September 2026
How each rate is set
The rates follow the Retail Price Index, a measure of inflation, taken from the March before each September reset. Plan 1 and Plan 4 charge whichever is lower of that index and the Bank of England base rate plus a fixed margin, and their rate can change during the year as well. Plan 5 charges the Retail Price Index. The Postgraduate Loan charges the index plus a fixed margin.
For Plan 5 and the Postgraduate Loan, the Department for Education compares the rate each month with similar rates in the commercial market. If the market rate is lower, a temporary cap brings the student loan rate down to it. The Postgraduate Loan row covers loans from England and Wales. Postgraduate finance from Northern Ireland is repaid under Plan 1, and from Scotland under Plan 4.
Plan 2 depends on income
Plan 2 has a variable rate. While the borrower is studying, it is normally the Retail Price Index plus a fixed margin, subject to a cap. After the course, the rate depends on income for the year: at the lower income limit and below, the borrower pays the index alone, above the upper limit the full margin is added, and between the two the margin grows with income. The same cap applies after the course as during it.
The Student Loans Company does not know a borrower's income for the year until it ends. Employed borrowers are charged the index rate alone during the tax year. Once HMRC passes on the income figures, the company checks the interest and adjusts the balance if a higher rate should have applied.
Interest and the monthly repayment
The interest rate has no effect on the amount taken from pay, which depends only on income above the plan's threshold. The student loan thresholds page lists those thresholds, and the student loan repayment calculator works out the deduction for a salary. Interest changes the balance, and so how long repayments continue.
Questions
Is interest added while income is below the threshold?
Yes. Interest is added each month even when the borrower is not working or earns less than the repayment threshold. The yearly statement shows how it was applied.
Why can one plan have two rates in the same tax year?
The tax year starts in April, and student loan rates are usually reset on the first of September. A rate can also change between resets, for example on Plan 1 and Plan 4 when the base rate moves, or on Plan 5 and the Postgraduate Loan when a cap starts or ends.
Which plan has a rate linked to income?
Only Plan 2. After the course ends, its rate depends on the borrower's income for the year. Every borrower on one of the other plans pays the same rate as everyone else on that plan.
This is information, not financial advice.