Postgraduate Loan Repayments: The Complete UK Guide
Updated January 2025
Key point: Postgraduate loans are separate from undergraduate loans. You repay 6% of income above £21,000 — and this is in addition to any undergraduate loan repayments you're making.
Who Has a Postgraduate Loan?
You have a Postgraduate loan if you received funding from Student Finance England for:
- Postgraduate Master's loan: Available from the 2016/17 academic year onwards
- Postgraduate Doctoral loan: Available from the 2018/19 academic year onwards
This is different from postgraduate loans taken out before September 2012, which fall under Plan 1.
What's covered
- Master's degrees (MA, MSc, MBA, MRes, etc.)
- Doctoral degrees (PhD, DPhil, professional doctorates)
- Postgraduate certificates and diplomas (PGCE falls under undergraduate funding)
Postgraduate Loan Repayment Terms
| Feature | Postgraduate Loan |
|---|---|
| Repayment threshold | £21,000 per year (£1,750/month) |
| Repayment rate | 6% of income above threshold |
| Interest rate | RPI + 3% (currently 7.3%) |
| Write-off period | 30 years from April after graduation |
| Maximum loan (Master's) | £12,471 (2024/25) |
| Maximum loan (Doctoral) | £29,390 (2024/25) |
Repaying Both Undergraduate and Postgraduate Loans
This is the situation that catches many graduates off guard. If you have both an undergraduate loan (Plan 1, 2, 4, or 5) and a Postgraduate loan:
You repay both simultaneously
- Undergraduate: 9% of income above your plan's threshold
- Postgraduate: 6% of income above £21,000
- Combined: Up to 15% of income above thresholds
Example: Plan 2 + Postgraduate with £45,000 salary
Plan 2 repayment:
£45,000 - £27,295 = £17,705 × 9% = £1,593.45/year
Postgraduate repayment:
£45,000 - £21,000 = £24,000 × 6% = £1,440/year
Total annual repayment: £3,033.45 (£252.79/month)
Different thresholds matter
Because the Postgraduate threshold (£21,000) is lower than most undergraduate thresholds, you may start repaying your Postgraduate loan before your undergraduate loan.
Use our UK student loan calculator to model both loans together and see your combined repayments.
Postgraduate Loan Interest
Postgraduate loans have the highest interest rate of any UK student loan type:
- Interest = RPI + 3% (currently 7.3%)
- No income-based taper like Plan 2 — everyone pays the maximum rate
- Interest accrues from the day you receive the money
- The Prevailing Market Rate cap applies when RPI is very high
Does the high interest matter?
For most Postgraduate borrowers, the interest rate is less important than it appears:
- If your loan will be written off after 30 years, interest only affects your paper balance
- Your actual lifetime payments are determined purely by your income
- Higher earners who'll repay in full should factor in the interest cost
When Postgraduate Loan Repayments Start
You start repaying the April after you finish or leave your course, provided you're earning above £21,000.
How repayments are collected
- Employed (PAYE): Deducted automatically through payroll
- Self-employed: Paid through Self Assessment alongside tax
Your payslip
Postgraduate loan deductions appear separately from undergraduate deductions on your payslip. You should see both itemised if you have both loan types.
Postgraduate Loan Write-Off
Your Postgraduate loan is written off 30 years after the April following your graduation. For example:
- Graduated July 2020 → Loan written off April 2051
- Graduated January 2024 → Loan written off April 2054
Any remaining balance is cancelled, and you owe nothing further.
Should You Take a Postgraduate Loan?
Key considerations:
Advantages
- No credit check required
- Repayments are income-contingent — you only pay if you earn enough
- Written off after 30 years if not fully repaid
- Doesn't affect your credit score
Disadvantages
- High interest rate (RPI + 3%)
- Combined with undergraduate loan, repayments can reach 15% of income above thresholds
- Lower threshold than most undergraduate plans means earlier repayment start
Alternatives to consider
- Employer sponsorship or funding
- Scholarships and bursaries
- Professional and Career Development Loans (though these have stricter terms)