Student Loans Interest Rates and Repayment Threshold Announcement

10 August 2026

The Department for Education today 10 August 2026 confirmed annual updates to interest rates for undergraduate and postgraduate Income Contingent Student Loans, repayment thresholds for Plan 1 Income Contingent Student Loans, and the interest rates and deferment threshold for Mortgage Style Student Loans.

Income Contingent Repayment Student Loans

Undergraduate loans

Income Contingent Student Loans for Plan 1 (1998-2012) undergraduate loans

The applicable Retail Price Index (RPI rate) is 4.1% for the period 1 September 2026 to 31 August 2027. The interest rate for Plan 1 income-contingent repayment student loans is RPI (4.1%) or the Bank Base Rate + 1% (currently 4.75%), whichever is lower.

The maximum interest rate on Plan 1 Income Contingent Repayment Loans during the period 1 September 2026 until 31 August 2027 will be 4.1%, the applicable rate of RPI for the period.

Subject to any decrease in the Bank base rate from 1 September, the interest rate will be set at RPI 4.1%.

Öğrenci kredilerinin yeni faiz oranları ve geri ödeme eşikleri

Please monitor this website regularly as the rates may change during the academic year.

The repayment threshold for Plan 1 loans will rise to £28,005 from 6 April 2027 to 5 April 2028.

Income Contingent Student Loans for Plan 2 (2012-2023) undergraduate loans

The applicable RPI rate is 4.1% for the period 1 September 2026 to 31 August 2027. Interest rates for Plan 2 income contingent student loans vary between RPI (4.1%) and RPI +3% (7.1%) depending on your circumstances. However, as announced on 7 April 2026, the maximum interest rate applied to plan 2 loans will be capped at 6% between 1 September 2026 to 31 August 2027.

Your circumstances	Interest rate
Whilst studying and until the April after leaving the course	RPI + 3% (7.1%), with a 6% cap applied between 1 September 2026 to 31 August 2027
Post-study	Variable interest, dependent upon income. RPI (4.1%), rising on a sliding scale up to RPI + 3% (7.1%), with a 6% cap applied between 1 September 2026 to 31 August 2027

Interest rates are subject to any caps to reflect the Prevailing Market Rate.

Income Contingent Student Loans for Plan 5 (from 2023 academic year) undergraduate loans

The applicable RPI rate is 4.1% for the period 1 September 2026 to 31 August 2027. The interest rate for Plan 5 is RPI (4.1%).

This rate is subject to any caps to reflect the Prevailing Market Rate.

Income Contingent Student Loans for Plan 3 postgraduate loans

The applicable RPI rate is 4.1% for the period 1 September 2026 to 31 August 2027. The interest rate for Plan 3 is RPI + 3% (7.1%). However, as announced on 7 April 2026, the maximum interest rate applied to plan 3 loans will be capped at 6% between 1 September 2026 to 31 August 2027.

This rate is subject to any caps to reflect the Prevailing Market Rate.