Should I overpay my student loan?
Student loan repayments are a fixed 9 per cent of income above the plan threshold (6 per cent for a Postgraduate Loan), and any balance left after the write-off period, up to 40 years on Plan 5, is cancelled under gov.uk's repayment rules. This projection shows what the numbers imply, not a recommendation.
How does the overpayment projection work?
Each year the model adds interest to the balance, then subtracts that year's repayment, calculated at 9 per cent of income above the threshold, or 6 per cent for a Postgraduate Loan, under gov.uk's guidance on repaying your student loan. Salary grows by the entered rate, and the loop runs to the plan's write-off horizon: 25 years on Plan 1, 30 on Plan 2 and Plan 4, and 40 on Plan 5. If the balance reaches zero first, the loan is cleared. If not, whatever remains outstanding is written off at that point.
Interest itself is calculated under gov.uk's separate guidance on how student loan interest is calculated. Because any balance still outstanding at the write-off point is cancelled, overpaying that portion can cost more than it saves for a borrower who was never going to clear the loan in full.
| Plan | Written off after |
|---|---|
| Plan 1 | 25 years |
| Plan 2 | 30 years |
| Plan 4 (Scotland) | 30 years |
| Plan 5 | 40 years |
| Postgraduate Loan | 30 years |
What would a worked example show?
Take a £45,000 Plan 5 balance on a £32,000 salary, 3% pay growth and 4.3% interest. The projection never clears it: an estimated £1,167 remains outstanding and is written off at year 40. On these numbers, extra payments toward that portion reduce a sum that was going to be cancelled anyway. Changing the inputs shows where that balance shifts.
Common questions
Should I pay off my student loan early?
The numbers point in different directions depending on the projection. Where a projection shows the loan clearing years before the write-off date, overpaying shortens the term and reduces the interest paid over that time. Where a projection shows a large balance being written off at year 30 or 40, the same overpayment reduces a sum that would have been cancelled, so it does not have the same effect in both cases.
Is a student loan really like a graduate tax?
For many people, yes. You pay a fixed percentage of income over the threshold for up to 30 or 40 years, then anything left is written off. If you never clear the balance, the total you pay depends on your earnings, not on how much you borrowed.
Does overpaying reduce my monthly deduction?
No. The monthly repayment is a percentage of income over the threshold and does not change with the balance. Overpaying only reduces how long you keep paying, and only helps if you were going to clear the loan before it is written off.
Why do most people never repay in full?
Because repayment is capped at a percentage of income and stops at the write-off date. On Plan 5, with a 40-year term and interest added each year, a typical balance often grows faster than a middle income can clear it, so the remainder is written off.
When is my student loan written off?
It depends on the plan: Plan 1 after 25 years, Plan 2, Plan 4 and Postgraduate after 30 years, and Plan 5 after 40 years, counted from the April repayment was first due. Anything outstanding at that point is cancelled.
How does the overpayment projection work?
Each year the model adds interest to the balance, then subtracts that year's repayment, 9 per cent of income above the threshold, or 6 per cent for a Postgraduate Loan. Salary grows by the entered rate, and the loop runs to the plan's write-off horizon. If the balance reaches zero first, the loan clears; if not, the remainder is written off at that point.
What would a worked example show?
On a projection that never clears the balance, an amount is shown as written off at the plan's write-off year, meaning further payments toward that portion reduce a sum that would otherwise have been cancelled. On a projection that clears the balance early, continuing to repay in full uses money that would not otherwise have been written off. The tool shows which situation applies for the figures entered.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.