Postgraduate Loan Repayments
Written by Mark Bennett
Postgraduate student loans are available for Masters degrees and similar qualifications across the UK. England, Scotland, Wales and Nothern Ireland offer different loans, but all four use an income-contingent system to calculate repayments.
English and Welsh postgraduate loan repayments are 6% of what you earn above £21,000 a year, while Scottish repayments are 9% of your income above £25,375 and Northern Irish repayments are 9% of your earnings above £20,195.
This page will help you understand how much your postgraduate loan repayments will be. We've included examples for different salaries plus a handy postgraduate loan repayment calculator that provides an instant estimate of your monthly repayment. There's also an FAQ in case you have any other questions. All of the information here is fully up-to-date for 2024.
Postgraduate loan repayments work very similarly to undergraduate loans.
You will be borrowing money from Government to pay for your Masters. This must be repaid after you graduate, but terms are designed to make sure this process is always manageable.
In order to do this, student loans work differently to bank loans (from commercial lenders).
Key details
Repayments for all UK postgraduate loans are subject to the following conditions:
- Your postgraduate loan repayment is income-contingent. The amount you repay will be based on the amount you currently earn over a set threshold. You will only make repayments when you are earning enough.
- You will repay undergraduate and postgraduate loans at the same time. This may involve two concurrent repayments, or one repayment towards a combined balance.
- Interest charged on your loan will normally be linked to inflation.
- You will become eligible to repay your loan in the April after your course ends but will only ever do so if you are earning enough.
- There is no postgraduate loan repayment deadline. You will simply make income-contingent repayments until your balance is cleared or your debt is cancelled. This happens once a certain number of years elapse from when you are eligible to begin repayments, regardless of how much you have left to repay.
Some more specific postgraduate loan repayment details differ for individual schemes. This table provides a simple comparison:
Postgraduate repayments compared
| Country
|
Threshold
|
Rate
|
Interest
|
UG loan
|
Cancelled
|
| England
|
£21,000
|
6%
|
RPI+3% (4.5%)
|
Separate
|
After 30 years
|
| Wales*
|
£21,000
|
6%
|
RPI+3% (4.5%)
|
Separate
|
After 30 years
|
| Scotland
|
£25,375
|
9%
|
2.75%**
|
Combined
|
After 30 years
|
| Northern Ireland
|
£22,015
|
9%
|
1.5%**
|
Combined
|
After 25 years
|
*As of 2019, Wales offers a combination of means-tested postgraduate grants and loans. The information in this guide refers to the postgraduate loan segment (the part you will repay). The repayment system is the same as it was for Welsh postgraduate loans in previous years.
**Postgraduate loans in Scotland and Northern Ireland use the same 'Plan 4' and 'Plan 1' student loan repayment system as their undergraduate loans. If you have both undergraduate and postgraduate loans under these systems, your debts will be combined.
This information is based on current guidelines issued by UK student finance organisations. For more information on the way individual loan schemes work, check out our full guides to postgraduate loans.
You can also jump to the list of frequently asked questions (FAQs) at the end of this page, if you have a more specific query about the postgraduate loan repayment.
What about PhD loans?
This page is about repayments for postgraduate Masters loans. England and Wales also offer doctoral loans for PhDs and other doctoral degrees. These use the same repayment system as the English and Welsh Masters loans.
If you have both Masters and PhD loans your debt and repayments will be combined. This means you will only ever make a maximum of one undergraduate and one postgraduate loan repayment each month.
Postgraduate loan repayment calculator
Our postgraduate loan repayment calculator can provide a quick estimate for your repayments. Simply select the country you'll be receiving a postgraduate loan from and input your salary. The calculator will then work out the approximate value of your monthly repayment.
How does the postgraduate loan repayment calculator work?
Our Masters loan calculator subtracts the repayment threshold for your loan from your suggested salary. This gives the portion of your earnings your repayments will be based on.
The postgraduate loan repayment calculator then divides this amount by the repayment % for your loan to work out how much you will repay in a year. Finally, it divides this result by 12 to give the typical monthly repayment amount that would be automatically deducted from your salary by HMRC.
This result is only an estimate for typical monthly repayments. If your salary changes from month-to-month (due to overtime, bonuses or other fluctuations) your repayments will too.
Also, the postgraduate loan repayment calculator does not include other deductions from your salary such as Income tax or National Insurance or separate undergraduate repayments (for English and Welsh loans).
The calculator above is a handy way to check monthly deductions for specific salaries, but what if you want to get a more general sense of what your postgraduate loan repayments could look like?
The tables below can help. They give approximate annual, monthly and weekly repayment figures for different salaries.
The first table is for England and Wales which use the same system of repayments at 6% of annual earnings over £21,000 (or the monthly / weekly equivalent):
Repayments – England and Wales
| Annual salary
|
Annual repayment
|
Monthly repayment
|
Weekly repayment
|
|---|
| £20,000 |
£0 |
£0 |
£0 |
| £25,000 |
£240 |
£20 |
£4.50 |
| £30,000 |
£540 |
£45 |
£10 |
| £35,000 |
£840 |
£70 |
£16 |
| £40,000 |
£1,140 |
£95 |
£21.50 |
| £45,000 |
£1,440 |
£120 |
£27.50 |
| £50,000 |
£1,740 |
£145 |
£33 |
| These are approximate figures calculated by working out an annual repayment value and then dividing it by 12 or 52 for monthly or weekly repayments. All values have been rounded down to the nearest £0.50. |
Remember that English and Welsh postgraduate loans aren't combined with undergraduate loans. This means you may have an extra repayment to make in addition to those above.
Scotland uses the Plan 4 system (the same system as Scottish undergraduate loans). This calculates repayments at 9% of annual income above £25,375.
Repayments – Scotland
| Annual salary
|
Annual repayment
|
Monthly repayment
|
Weekly repayment
|
|---|
| £20,000 |
£0 |
£0 |
£0 |
| £25,000 |
£0 |
£0 |
£0 |
| £30,000 |
£450.00 |
£37.50 |
£8.50 |
| £35,000 |
£900.00 |
£75.00 |
£17.00 |
| £40,000 |
£1,350.00 |
£112.50 |
£25.50 |
| £45,000 |
£1,800.00 |
£150.00 |
£34.50 |
| £50,000 |
£2,250.00 |
£187.50 |
£43.00 |
| These are approximate figures calculated by working out an annual repayment value and then dividing it by 12 or 52 for monthly or weekly repayments. All values have been rounded down to the nearest £0.50. |
Northern Ireland uses the Plan 1 system which currently calculates repayments at 9% of annual earnings over £22,015 (or the monthly / weekly equivalent). You don't need to worry about the differences between repayment systems (or their names). Just make sure you're looking at the right one for your loan.
Repayments – Northern Ireland
| Annual salary
|
Annual repayment
|
Monthly repayment
|
Weekly repayment
|
|---|
| £25,000 |
£451.00 |
£37.50 |
£8.50 |
| £30,000 |
£901.00 |
£75.00 |
£17.00 |
| £35,000 |
£1,359.00 |
£113.00 |
£26.00 |
| £40,000 |
£1,809.00 |
£150.50 |
£34.50 |
| £45,000 |
£2,304.00 |
£192.00 |
£44.00 |
| £50,000 |
£2,709.00 |
£225.50 |
£52.00 |
| These are approximate figures calculated by working out an annual repayment value and then dividing it by 12 or 52 for monthly or weekly repayments. All values have been rounded down to the nearest £0.50. |
As you can see, repayments are higher for Northern Irish loans due to the lower threshold and higher repayment rate. This is partially offset by the fact that these repayments include your undergraduate loan (if you have one).
Check with student finance
The information on this page summarises the current repayment terms and provides approximate examples of what you might end up repaying.
We do our best to keep things up to date, but we recommend you also check the Student Loan Company's own student loan repayment website to ensure you have the very latest information.
Repayment FAQs – questions and answers
Got an additional question about repaying your Masters loan? We've answered some common queries about repayment processes, terms and conditions.
When will my postgraduate loan repayments start?
You will be eligible to make postgraduate loan repayments from the April after your course finishes, but will only do so when you are earning over the threshold.
How will postgraduate loan repayments be taken?
Repayments will only ever be taken whilst you are earning over your threshold. The way this happens will depend on the kind of work you do:
- If you are employed your repayments will be deducted automatically from your monthly salary and paid to HMRC by your employer.
- If you are self-employed you will make repayments as part of your annual Self Assessment tax return.
However you pay, you will receive an annual statement of your loan balance. This will record your repayments and interest.
What happens if I live or work abroad?
HMRC will not be able to take automatic postgraduate loan repayments from outside the UK. However, you must still repay your loan when you are eligible to do so. You must notify your postgraduate loan provider if you will be living outside the UK for more than three months. They will help you assess the repayments you need to make and provide a means of doing so.
Do I repay a percentage of my total income, once I'm earning over the threshold?
No. This is a common misconception about student loan repayments, but it has the potential to be quite alarming. Your postgraduate (and undergraduate) loan repayments will only ever be taken from the income you earn over your threshold.
For example: if you earn £25,000 in one year and have an English postgraduate loan, you will be eligible to make repayments during that year. This is because £25,000 is above your repayment threshold of £21,000.
However, you will only repay 6% of £4,000 (your income over £21,000) not 6% of £25,000 (your full salary). This is the difference between repaying £20 a month or repaying £105 a month - quite significant!
What happens if I temporarily earn above the repayment threshold?
You will be due to make repayments whenever you earn over the threshold in a given repayment period. This means that overtime, a bonus or additional temporary work could make you eligible for repayments in a particular month, even if your regular earnings are below your threshold.
For example: if you had an English postgraduate loan and earned £20,000 a year, you would not normally make monthly repayments. Your monthly salary would be approximately £1,666. This is below the monthly repayment threshold of £1,705 (the monthly equivalent of £21,000).
But, if you earned worked overtime in that month and made an extra £200, you would make a postgraduate loan repayment. This is because your total monthly earnings would now be £1,866. In this scenario your employer would deduct £9 for your loan (6% of £161 - your earnings above the monthly threshold).
Assuming your earnings returned to normal next month, you would not make a further postgraduate loan repayment. If your total earnings for the year were eventually still below the annual repayment threshold you would also be able to claim back any overpaid postgraduate loan repayments.
Are postgraduate loan repayments taken before, or after, tax?
Repayments are calculated based on your total (gross) earnings, before any income tax (or National Insurance) is deducted.
For example: if you earned an annual salary of £23,000, you would pay £2,100 in income tax for that year (20% of your income over £12,500). This would leave you with £20,900 (before other deductions were made).
£20,900 is below the postgraduate loan repayment threshold in England and Wales (£21,000), but that doesn't matter: your postgraduate loan repayments will be calculated based on your gross income, before tax.
In this scenario you would repay £120 over the year for your postgraduate loan (6% of the £2,000 you earned over the £21,000 repayment threshold) as well as £2,100 in income tax. You would also make National Insurance payments (and undergraduate loan repayments) based on your total income.
Will I have to repay my entire loan?
Postgraduate loans are provided on the assumption that students will earn enough to repay their loans. The UK Government believes that Masters-level qualifications will boost graduates' employability and earnings, meaning that loans are a worthwhile investment.
However, postgraduate loan debt will expire after a certain period of time elapses from the point at which you are eligible to make repayments (the April after your course ends). This is currently 30 years for English Welsh and Scottish loans and 25 years for Northern Irish loans.
Students with Welsh postgraduate finance (from 2019-20 onwards) should also note that only your postgraduate loan needs to be repaid. You do not have to repay any part of your means-tested postgraduate grant.
Will I be able to afford my postgraduate loan repayments?
The income-contingent repayment system is designed to make postgraduate loans affordable. You will only repay your loan when you are earning over the threshold.
However, you should bear in mind that postgraduate loan repayments won't be the only deductions from your salary. It's worth calculating the impact they could have alongside other student loans and / or income tax and National Insurance.
Can I make additional repayments?
Yes. If you wish to pay off your postgraduate loan sooner, you can make extra payments towards your balance. These could be one-off contributions, a monthly plan, or a repayment of your balance in full.
Note that these payments will be made on top of your income-contingent deductions. In some cases they may also incur small administrative charges.
What happens if I miss a repayment?
Normally, you won't need to worry about missing postgraduate loan repayments. The income-contingent system means they are taken automatically whenever you are earning enough.
However, it's possible that you could miss payments if you receive undeclared income, in the UK or abroad. If this is the case you should contact your loan provider to avoid entering arrears.
What happens if I don't finish my course?
You will still be eligible to repay any postgraduate loan you have received, even if you 'drop out of' your Masters or fail to earn your degree.
If you do leave your course early it is important that you notify your student finance provider. If you do not do so, any further (incorrect) payments to you may be regarded as overpayments. Repayment of these extra amounts may not be income-contingent (and may be expected more promptly as a result).
Will the repayment threshold for postgraduate loans rise?
This depends on the loan.
The threshold for Scottish and Northern Irish student loan repayments rises each year and this applies to undergraduate and postgraduate loans.
The threshold for English and Welsh postgraduate loans is not currently due to rise. Changes have been made to undergraduate loan repayments, but these do not affect postgraduate loans.
Will the interest rate for postgraduate loans rise?
The interest rate for English and Welsh postgraduate loans is calculated each year based on the Retail Prices Index (which is a measure of inflation) plus 3%. This means that the interest rate normally changes each September.
The interest rate for Scottish postgraduate loans is currently 2.75%. The interest rate for the Northern Irish postgraduate loans is 1.5%.
Can other repayment details change?
The Government is able to retrospectively alter some elements of student loan repayment, such as the threshold. This has happened for undergraduate loans but no changes have so far been made (or proposed) for postgraduate loans since they were first introduced in 2016.
Our blog and newsletter will cover any future proposals or changes as soon as they are announced.
Other questions?
We can't provide advice on your specific repayments or loan balance (we recommend you get in touch with the student finance agencies, below, for those) but we can answer general questions about how the loans work.
If there's a question you can't find the answer to here you can email us at editor[at]findamasters.com.
This page should hopefully make it easier to understand how postgraduate repayments work - and what their effect could be on your future salary.
It’s absolutely right to think carefully and responsibly about any loan commitments, for any purpose. Hopefully this information helps you make the decision about whether a postgraduate loan is right for you.
For more general information, see our detailed guides to Masters loans in England, Wales, Scotland and Northern Ireland. You can also read more about the UK doctoral loans.
Please note that the resources on this page are provided in good faith, based on current information on postgraduate loan repayments.
We recommend that you
always
check the latest guidelines from UK postgraduate loan providers:
You can also sign up to our newsletter to be informed of changes and updates to postgraduate loans and other Masters funding.
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