Student Loan Calculator

A detailed worked example

Take a Detective Constable earning £42,000 a year. The calculation is straightforward once you have the right figures: subtract the threshold from gross salary to find the amount of income the repayment rate applies to, then apply the repayment rate to that amount. This amount is deducted automatically from pay by the employer's payroll system and passed to the Student Loans Company, appearing as a separate line on the payslip alongside income tax, National Insurance and pension contributions.

The table below shows how the same £42,000 salary produces a noticeably different repayment depending on which plan applies — a higher annual repayment under Plan 1 than Plan 2, purely because of the lower threshold, even though the salary and repayment rate are identical. This illustrates why knowing your correct plan matters.

Why repayments are based on gross salary, not take-home pay

A common point of confusion is why student loan repayments are calculated on gross salary — or more precisely, gross income above the threshold — rather than on take-home pay after tax, National Insurance and pension contributions have already been deducted. Repayments are calculated by your employer's payroll system directly from your gross pay figure for each pay period, applying the 9% (or 6% for postgraduate loans) rate to whatever portion of that period's gross pay sits above the pro-rated threshold for that pay period.

This means student loan repayments sit alongside income tax, National Insurance and pension contributions as one of several deductions taken from gross pay, rather than being calculated as a percentage of whatever is left over after the others have already been deducted. This is a deliberate design choice in how the repayment system works.

How repayments rise as your salary rises

Because the repayment is calculated as 9% of everything above the threshold, your monthly or annual repayment amount rises in direct proportion to any increase in your salary above the threshold, whether that increase comes from annual incremental pay scale progression, a cost-of-living uplift recommended by the Police Remuneration Review Body, or a promotion to a higher rank.

For example, if our earlier Detective Constable on £42,000 received a £2,000 pay rise, taking them to £44,000, their repayment calculation would become £44,000 minus £29,385, giving £14,615 above the threshold, and 9% of that comes to £1,315.35 a year — an increase of £180 a year in student loan repayments purely from that one pay rise, in addition to the extra income tax and National Insurance also due on the increase. This is worth factoring in when thinking through the real take-home value of a pay rise or promotion: the gross increase is reduced not only by tax, NI and any change in pension contribution tier, but also by an additional 9% of the increase if you're still repaying a student loan and your salary sits above the relevant threshold, which can make the actual net benefit of a promotion noticeably smaller than the headline gross figure suggests.

Running a postgraduate loan alongside an undergraduate plan

If you took out both an undergraduate loan (Plan 1, 2, 4 or 5) and a postgraduate loan, you can be repaying both simultaneously, and the two are calculated independently rather than being combined into a single threshold and rate. Each loan has its own threshold and its own repayment rate, and both repayments are deducted from the same gross pay figure in the same pay period, in addition to each other.

Using the earlier example of a £42,000 salary with a Plan 2 undergraduate loan (threshold £29,385, rate 9%) and also a postgraduate loan (threshold £21,000, rate 6%): the Plan 2 repayment is calculated as before, at £1,135.35 a year. The postgraduate loan repayment is calculated separately as £42,000 minus £21,000, giving £21,000 above its threshold, at 6%, which comes to £1,260 a year. The two are added together, giving a combined annual student loan repayment of £2,395.35 — a substantially larger deduction than either loan would produce on its own, since both thresholds are being cleared by the same salary and both rates apply simultaneously to their respective bands. If you have both types of loan, it's worth using the calculator to see the combined figure directly, since manually adding two separate percentage calculations is an easy place to make an arithmetic slip.

Voluntary overpayments: when they make sense, and when they don’t

Because student loan repayments are collected automatically through PAYE based on income, many borrowers never actively decide whether to repay their loan faster — the system simply takes a fixed percentage of income above the threshold each pay period, regardless of the total amount outstanding. It is possible to make voluntary additional repayments directly to the Student Loans Company, on top of what's collected through payroll, but whether this is a sensible use of money depends heavily on individual circumstances and loan type.

For Plan 2, Plan 4, Plan 5 and postgraduate loans, unpaid balances are written off after a set number of years from when you started repaying (the exact period depends on the plan), and interest rates on these plans are often linked to RPI, sometimes with an additional margin depending on income. For many graduates on these plans, particularly those with large loan balances relative to their likely lifetime earnings, the loan functions in practice more like an additional income tax than a conventional debt — a fixed percentage of income above a threshold, for a fixed number of years, after which any remaining balance is cancelled regardless of how much has been repaid. In that situation, voluntary overpayments can mean paying money towards a balance that would have been written off anyway, effectively wasting the overpayment.

Plan 1 loans, by contrast, have historically had a lower interest rate and, for some borrowers, particularly higher earners who are likely to clear the balance in full before the write-off point, voluntary overpayments can make more sense, since they're more likely to actually reduce the total amount eventually repaid rather than simply pre-paying an amount that would have been written off regardless. Because the right answer depends on your specific plan, your loan balance, your expected future income, and how many years you have left before write-off, it is worth using the Student Loans Company's own online tools, or speaking to an independent financial adviser, before making a significant voluntary overpayment, rather than assuming that repaying a student loan faster is automatically the financially sensible choice — for many police officers on Plan 2 or later plans, it usually isn't.

Checking your balance and interest rate

Your student loan balance, the interest currently being applied, and a record of repayments collected to date are all available through your online account with the Student Loans Company, which is the authoritative source for this information rather than any estimate produced by a third-party calculator. It's worth checking this at least once a year, both to confirm that your employer has been correctly reporting and passing on your repayments, and to understand how your balance is moving given the interest being applied to it.

Interest rates differ by plan and are typically reviewed periodically in line with RPI and, for some plans, an income-linked additional margin, meaning the rate you're charged isn't necessarily fixed for the life of the loan. If you notice a discrepancy between what you believe has been deducted from your payslips over the year and what appears on your Student Loans Company account, this is worth raising with your employer's payroll department promptly, since delays in employers reporting deductions can occasionally cause a temporary mismatch between what's been taken from your pay and what's been recorded against your loan.

How promotion and pay progression change your repayment over a career

Because police pay tends to rise fairly predictably over a career — through annual incremental progression up a pay scale, periodic PRRB-recommended uplifts, and occasional promotions — it's worth thinking about student loan repayments not just as a snapshot at your current salary, but as something that will gradually take a larger cash amount, though a broadly stable percentage of income above the threshold, as your career progresses.

For an officer early in their career, perhaps a Constable on a lower scale point with a salary close to the relevant threshold, the monthly repayment amount may be modest, sometimes only a small fraction of what a more senior colleague pays. As that same officer progresses up the Constable scale, is promoted to Sergeant, and potentially beyond, an increasing proportion of their income sits above the threshold, and the cash amount deducted for student loan repayment each month grows accordingly. This is a normal and expected feature of the system rather than something to be concerned about, but it's a useful thing to factor into longer-term financial planning, particularly when assessing the real take-home benefit of a promotion, since the student loan deduction is one of several deductions that scale up alongside a pay rise.

Officers who are getting close to their write-off date — the point, a set number of years after starting repayment, at which any remaining Plan 2, Plan 4, Plan 5 or postgraduate loan balance is cancelled regardless of what's left outstanding — may find it worth checking their expected write-off date against their current balance and repayment trajectory, since for some borrowers nearing this point, continuing pay rises simply mean paying slightly more towards a balance that would be written off in any case within a few years, reinforcing the earlier point that voluntary overpayments are rarely worthwhile for borrowers in this position.

Student loan repayments and part-time or variable pay

Because student loan repayments are calculated period by period against a pro-rated threshold, rather than as a single annual reconciliation, officers with variable or part-time pay can see their repayment fluctuate noticeably from one pay period to the next, even though the underlying 9% (or 6% postgraduate) rate never changes. A month with significant overtime, for example, might push more of that period's gross pay above the pro-rated threshold, resulting in a higher student loan deduction for that specific payslip, in much the same way it can temporarily push more income into a higher tax band.

Officers who work part-time throughout the year, with a consistently lower gross salary, may find their pay in some or all periods doesn't reach the pro-rated threshold at all, meaning no student loan repayment is due for those periods. If your income fluctuates across the year — whether due to part-time hours, variable overtime, or a change in role partway through the year — it's worth knowing that, unlike income tax, student loan repayments calculated through PAYE are not typically reconciled on a cumulative annual basis in the same way; each pay period is generally assessed on its own against the pro-rated threshold for that period. This means if your income is genuinely irregular, the total annual repayment collected through payroll can differ slightly from what a simple annual calculation based on your P60 figure would suggest, and HMRC and the Student Loans Company have processes in place to review and correct any such discrepancy at the end of the tax year if needed.