Quick Summary
- Plan 4 threshold is £32,745 — the highest of all undergraduate plans, meaning Scottish graduates start repaying later and pay less monthly than English graduates
- Repayment rate is 9% — you pay 9% of everything earned above the threshold, deducted through PAYE like tax
- Loans are written off after 30 years — many graduates will never fully repay, making voluntary overpayments a waste of money
- Use our free calculator — the Student Loan Calculator shows your monthly repayments, total cost, and whether your loan will be written off
If you studied in Scotland with a SAAS (Student Awards Agency Scotland) loan, you're on Plan 4. It has the most generous repayment threshold of any UK undergraduate student loan plan — but Scotland's higher income tax rates mean the combined marginal deductions from your salary can be steep.
Quick Answer: Plan 4 student loans (Scottish SAAS) have a repayment threshold of £32,745 for 2025/26. You repay 9% of income above this threshold. On a £35,000 salary, that's £27/month. Loans are written off 30 years after the April following graduation. Many graduates — especially those with balances over £30,000 — will have their loan written off before they fully repay it, so voluntary overpayments often mean paying more than necessary. Check your situation with our Student Loan Calculator.
How Plan 4 repayments work
Plan 4 repayments are straightforward:
- You earn above the threshold (£32,745 in 2025/26)
- You pay 9% of everything above the threshold
- Repayments are deducted automatically through PAYE
- If you're self-employed, you pay through Self Assessment
Monthly repayment examples
| Annual salary | Monthly repayment | Annual repayment |
|---|---|---|
| £25,000 | £0 | £0 |
| £30,000 | £0 | £0 |
| £35,000 | £17 | £203 |
| £40,000 | £54 | £653 |
| £45,000 | £92 | £1,103 |
| £50,000 | £130 | £1,553 |
| £60,000 | £205 | £2,453 |
| £75,000 | £318 | £3,803 |
| £100,000 | £505 | £6,053 |
Notice that on a £35,000 salary, you're only repaying £27/month. Compare that to a Plan 2 graduate on the same salary repaying £58/month — nearly double.
Try it yourself
Enter your salary and loan balance to see your monthly repayments, total cost, and year-by-year projection.
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Plan 4 vs other plans: threshold comparison
| Plan | Threshold (2025/26) | Rate | Write-off period |
|---|---|---|---|
| Plan 4 (Scotland) | £32,745 | 9% | 30 years |
| Plan 1 (pre-2012 England) | £24,990 | 9% | 25 years |
| Plan 2 (post-2012 England) | £27,295 | 9% | 30 years |
| Plan 5 (post-2023 England) | £25,000 | 9% | 40 years |
| Postgraduate | £21,000 | 6% | 30 years |
Plan 4's £32,745 threshold is the highest of all undergraduate plans. This means:
- You don't start repaying until you earn more than most graduates
- When you do repay, you pay less each month than graduates on other plans
- On a £40,000 salary, a Plan 4 borrower pays £774/year vs £1,143/year on Plan 2
The flip side: Scottish tax rates
While Plan 4 has the most generous threshold, Scottish graduates also face higher income tax rates. A Plan 4 borrower earning £50,000 in Scotland faces a combined marginal rate of 51%: 42% Scottish Higher rate + 9% student loan. In England, a Plan 2 borrower at the same salary faces 49% (40% + 9%).
The student loan might cost less per month, but the income tax costs more — so the total payslip deduction for a Scottish graduate can be similar to or higher than an English one.
Will your loan be written off?
Plan 4 loans are written off 30 years after the first April following your graduation (or the date you left your course). If you graduated in June 2020, your loan would be written off in April 2051.
Whether your loan is written off depends on three factors:
- Your loan balance — larger balances are harder to repay
- Your salary trajectory — higher earners repay faster
- Interest rates — interest accrues while you're repaying
Worked example: will a £40,000 loan be repaid?
Scenario A: £30,000 starting salary, 2% annual growth
Starting salary of £30,000 growing at 2% per year. For the first few years, you earn below the threshold and repay nothing. By year 5 your salary hits £33,122 and you start repaying. Over 30 years, you'd repay approximately £28,000–£35,000 depending on interest rates. With a £40,000 balance, the loan is likely written off with £5,000–£12,000 cancelled.
Scenario B: £45,000 starting salary, 3% annual growth
Higher starting salary means immediate repayments of £1,224/year, growing as your salary increases. Over 30 years, you'd comfortably repay the £40,000 balance plus interest. The loan is fully repaid in approximately 18–22 years.
The key insight: for many Scottish graduates on moderate salaries (£25,000–£40,000), Plan 4 loans function more like a graduate tax than a traditional loan. You pay 9% of income above the threshold for 30 years, then the rest is cancelled.
If your loan will be written off anyway, making voluntary overpayments means paying more than you need to. Only overpay if you're confident you'll fully repay the loan before the 30-year write-off date. Our calculator's year-by-year projection shows you exactly where you stand.
Should you voluntarily repay your student loan?
This is one of the most common questions Scottish graduates ask. The answer depends entirely on whether you'll repay the full balance before the write-off date.
When overpaying makes sense
- Your balance is relatively small (under £15,000)
- You earn a high salary (over £50,000) and expect it to grow
- Our calculator shows you'll fully repay well before the write-off date
- You want to reduce the total interest you'll pay
When overpaying is a waste of money
- Your balance is large (over £30,000) and your salary is moderate
- Our calculator shows the loan will be written off
- You have higher-interest debt (credit cards, personal loans) that should be prioritised
- The money could earn a better return invested elsewhere
Never prioritise student loan overpayments over clearing high-interest debt. Credit card debt at 20%+ APR costs far more than student loan interest. Pay off expensive debt first, build an emergency fund, then consider student loan overpayments only if the numbers make sense.
Interest rates on Plan 4 loans
Plan 4 loans accrue interest based on the Retail Price Index (RPI). For 2025/26, the rate is approximately 6.25%, though this changes annually.
Unlike Plan 2 loans (which charge RPI + up to 3% for higher earners), Plan 4 interest doesn't increase with your salary. All Plan 4 borrowers pay the same rate regardless of income.
However, because the interest rate often exceeds what you're repaying — especially in the early years — your balance can grow even while you're making repayments. This is normal and doesn't mean you're doing anything wrong. If the loan is going to be written off anyway, the growing balance is irrelevant to you.
How salary sacrifice interacts with Plan 4
Salary sacrifice reduces your gross salary, which in turn reduces your student loan repayments. This can be a significant benefit for Plan 4 borrowers.
Example: £45,000 salary with £5,000 pension sacrifice
- Without sacrifice: Student loan repayment = (£45,000 - £32,745) × 9% = £1,103/year
- With sacrifice: Student loan repayment = (£40,000 - £32,745) × 9% = £653/year
- Student loan saving: £450/year (approximately)
On top of the income tax (£2,100) and NI (£400) savings from the sacrifice itself, you save an additional £450 in student loan repayments. The £5,000 pension contribution effectively costs you only £2,050 in reduced take-home pay.
Use our Salary Sacrifice Calculator to see the full picture.
Try it yourself
See your year-by-year repayment projection and whether your loan will be written off.
Open Student Loan CalculatorNo sign-up required.
Frequently Asked Questions
What is a Plan 4 student loan?
Plan 4 is the repayment plan for student loans taken out through the Student Awards Agency Scotland (SAAS). If you started a higher education course in Scotland on or after 1 September 1998, your loan is on Plan 4. It has a repayment threshold of £32,745 for 2025/26 and is written off after 30 years.
How do I know if I'm on Plan 4?
Check your payslip — it will show student loan deductions and may specify the plan. You can also check on the Student Loans Company (SLC) website or by calling them. If you studied in Scotland with a SAAS loan, you're almost certainly on Plan 4.
Is Plan 4 the same as Plan 1?
No. Plan 4 replaced Plan 1 for Scottish borrowers in April 2021. The key difference is the threshold: Plan 4 is £32,745 vs Plan 1's £24,990. If you had a Plan 1 loan and studied in Scotland, you were automatically moved to Plan 4 in 2021.
Can I have Plan 4 and a Postgraduate Loan at the same time?
Yes. If you have both, 9% of income above £32,745 goes to your Plan 4 loan, and 6% of income above £21,000 goes to your Postgraduate Loan. The deductions are calculated separately and stack on top of each other, which can result in high combined marginal deductions.
What happens to my student loan if I move to England?
Your Plan 4 loan stays on Plan 4 regardless of where you live. The £32,745 threshold and 30-year write-off period don't change if you move to England. The only difference is you'd pay English income tax rates instead of Scottish ones.
Does my student loan affect my credit score?
No. Student loans don't appear on your credit report and don't affect your credit score. However, some mortgage lenders factor student loan repayments into their affordability calculations, as they reduce your net monthly income.
Related Articles
- Scottish Income Tax Rates 2025/26 — understand the tax bands that affect your combined marginal rate
- Salary Sacrifice in Scotland — reduce your student loan repayments through sacrifice
- Take-Home Pay Calculator — see your net pay after all deductions including student loan
- Scotland vs England Comparison — compare your total deductions across the border
- All Calculators — explore the full range of Scottish finance tools
This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax rates and thresholds can change — always verify current rates with Revenue Scotland, HMRC, or mygov.scot, and speak to a qualified financial adviser for advice specific to your circumstances.
Sources: Student Loans Company — Repayment thresholds, SAAS — Student funding, HMRC — Student loan repayments