What Is a Plan 4 Student Loan?
Plan 4 is the loan for Scottish students. It has the highest repayment threshold of any UK plan — £33,792 a year — so you keep more of your salary before repayments start. Interest is capped at the lower of RPI or base rate + 1%, and any balance is written off after 30 years.
Plan 4 at a Glance
- Who
- Scotland
- All years
- Repayment threshold
- £33,792/yr
- £2,816/mo
- Repayment rate
- 9%
- of income above threshold
- Interest
- Lower of RPI or base rate + 1%
- 3.2% now
- Written off after
- 30 years
What Plan 4 means
A Plan 4 student loan is repaid at 9% of income above £33,792 a year (£2,816 a month), the highest threshold of any plan. Interest is capped at the lower of RPI or the Bank of England base rate plus 1%.
Plan 4 replaced the old Scottish "Plan 1" arrangement in 2021, but it applies to Scottish students across all start years. Any balance is written off 30 years after you became due to repay.
Who is on Plan 4?
You are on Plan 4 if you took out an undergraduate student loan from the Student Awards Agency Scotland (SAAS) as a Scottish student.
Plan 4 applies regardless of when you studied — Scotland moved existing Scottish borrowers onto Plan 4 terms, including its higher repayment threshold.
Not sure this is you? Take the 3-question which plan quiz to confirm.
Plan 4 interest rate
Plan 4 interest is charged at the lower of RPI (3.2%) or the Bank of England base rate plus 1% (4.75%), currently 3.2% — the same low, capped approach as Plan 1.
Combined with the highest threshold of any plan, this makes Plan 4 one of the gentler loans to repay: you start later and the balance grows slowly.
For a full walkthrough of how student loan interest compounds, read how student loan interest works.
How Plan 4 compares to other plans
Plan 4's £33,792 threshold is higher than Plan 1 (£26,892), Plan 2 (£29,376) or Plan 5 (£24,996), so at the same salary you repay the least each month. Its capped interest also keeps it far cheaper over time than Plan 5's 40-year RPI-linked loan.
| Plan | Who & when | Threshold | Rate | Interest | Write-off |
|---|---|---|---|---|---|
| Plan 1 | England, Wales & N. IrelandPre-2012 (all years for NI) | £26,892 | 9% | Lower of RPI or base rate + 1%3.2% now | 25 yrs |
| Plan 2 | England & Wales2012-2023 | £29,376 | 9% | RPI to RPI + 3% (income-based)3.2%–6.2% now | 30 yrs |
| Plan 4 | ScotlandAll years | £33,792 | 9% | Lower of RPI or base rate + 1%3.2% now | 30 yrs |
| Plan 5 | England2023+ | £24,996 | 9% | RPI only3.2% now | 40 yrs |
| Postgraduate Loan | UK-wideAll years | £21,000 | 6% | RPI + 3%6.2% now | 30 yrs |
See the full breakdown on the UK student loan plans hub.
Why middle earners feel Plan 4 the most
Because Plan 4 pairs the highest threshold with capped interest, the middle-earner squeeze is milder than on Plan 2 or Plan 5. Still, borrowers who earn steadily above £33,792 for decades can repay a large share of their loan, while lower earners reach the 30-year write-off first. See where your salary falls.
Middle earners repay the most across every UK plan — enough to make real repayments, but not enough to clear the balance before interest bites. Put your own salary into the student loan repayment calculator to see exactly where you fall.
Plan 4 FAQs
- What is a Plan 4 student loan?
- Plan 4 is the UK student loan plan for Scottish students. You repay 9% of income above £33,792 a year — the highest threshold of any plan — interest is capped at the lower of RPI or base rate + 1% (currently 3.2%), and any balance is written off after 30 years.
- What is the Plan 4 repayment threshold?
- The Plan 4 threshold is £33,792 a year (£2,816 a month), the highest of any UK student loan plan. You repay 9% of everything you earn above it.
- What is the Plan 4 interest rate?
- Plan 4 interest is the lower of RPI (3.2%) or the Bank of England base rate plus 1% (4.75%), currently 3.2% — the same capped rate as Plan 1.
- Who is on Plan 4?
- Scottish students who borrowed through the Student Awards Agency Scotland are on Plan 4, across all start years. It replaced the previous Scottish arrangement and carries the highest repayment threshold of any plan.