Plan 2 vs Plan 5: Which Is Better?
Plan 2 and Plan 5 are the two loan types most English university students will encounter. Plan 2 covers those who started between 2012 and 2023, while Plan 5 applies from 2023 onwards. They differ in repayment threshold, interest rate, and write-off period — and these differences can mean tens of thousands of pounds more or less repaid over your career.
Side-by-Side Comparison
The key terms of each plan at a glance. Plan 5 has a lower threshold and longer write-off, but simpler (and lower) interest.
| Feature | Plan 2 | Plan 5 |
|---|---|---|
| Eligibility | 2012-2023 | 2023+ |
| Repayment threshold | £28464/yr | £24996/yr |
| Repayment rate | 9% | 9% |
| Interest rate | RPI to RPI + 3% (sliding scale) | RPI only |
| Write-off period | 30 years | 40 years |
Total Repayment by Salary
How much you repay in total depends heavily on your salary. This chart shows the total amount repaid over the life of each loan for a range of starting salaries, assuming a balance of £45,000.
Balance Over Time
See how the outstanding balance changes month by month. Toggle between salary levels to see how income affects the repayment trajectory for each plan.
Which Plan Do I Have?
You cannot choose between Plan 2 and Plan 5 — your plan is determined by when and where you started your course. Plan 2 covers English and Welsh students who started university between September 2012 and July 2023. Plan 5 applies to English students who started from September 2023 onwards.
The cutoff is August 2023. If you started in the 2022–23 academic year, you are on Plan 2. If you started in September 2023 or later, you are on Plan 5. Note that Plan 5 is England-only — Welsh students who started after August 2023 remain on Plan 2.
Not sure? Take the which plan quiz to find out.
How the Threshold Difference Affects You
Plan 5’s lower repayment threshold means you start repaying sooner and pay more each month at the same salary. Both plans charge 9% on income above the threshold, but the thresholds are different: £28,464 for Plan 2 versus £24,996 for Plan 5.
For example, at a £30,000 salary, a Plan 2 borrower repays just £138 per year, while a Plan 5 borrower repays £450per year — over three times as much. This gap narrows at higher salaries where both plans collect substantial repayments, but at lower salaries the threshold difference is the dominant factor.
Can You Switch Plans?
No. Your plan is permanently determined by your course start date. There is no mechanism to switch between Plan 2 and Plan 5.
If you take out a second degree after August 2023, the new loan will be on Plan 5, but your original Plan 2 loan stays on Plan 2. The two loans are repaid separately under their own terms.
Which Plan Should You Worry About?
For most borrowers, repayments are automatic through PAYE — you do not need to do anything. The real question is whether it makes sense to overpay your loan.
Plan 2 middle earners are hit hardest. They earn too much for the 30-year write-off to help significantly, but not enough to pay off the balance quickly before interest (up to RPI + 3%) compounds over decades. These borrowers often end up repaying more in total than Plan 5 borrowers on the same salary.
Use the student loan repayment calculator to model your specific scenario and see exactly how much you’ll repay under your plan.
Key Takeaways
- Lower earners often pay more on Plan 5 because the 40-year term and lower threshold mean more months of repayments.
- Middle earners may pay more on Plan 2 because interest can reach RPI + 3%, and they earn too much for write-off to help but not enough to pay off the balance quickly.
- Plan 5’s simpler interest (RPI only) makes the balance more predictable, but the longer write-off window is the real cost driver.
- Plan 5’s lower threshold (£24,996 vs £28,464) means earlier and larger repayments at the same salary.
- Model your own salary in the student loan calculator to see the total cost under each plan.