Plan 2 vs Plan 5 student loans: what’s the difference?

On £35,000: Plan 2 takes about £42 a month, Plan 5 about £75 a month.
What it means: more Plan 5 graduates repay in full, because the threshold is lower and the loan lasts 10 years longer. Many Plan 2 graduates never clear theirs, so part is written off.

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Plan 2 is for students in England and Wales who started university between 2012 and July 2023. Plan 5 is for students in England who started from 1 August 2023. Plan 5 has a lower repayment threshold (£25,000 a year against £29,385) and lasts 40 years instead of 30, but charges interest at inflation (RPI) only. Both take 9% of your pay above the threshold.

	Plan 2	Plan 5
Who it’s for	Started uni 2012 to July 2023 (England, Wales)	Started from 1 August 2023 (England)
You repay 9% of pay over	£29,385 a year (frozen until April 2030)	£25,000 a year
Written off after	30 years	40 years
Interest	Inflation (RPI) plus up to 3%, capped at 6% until August 2027	Inflation (RPI) only

Plan 2 vs Plan 5 student loans: what’s the difference?

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