NHS staff student loan repayments
NHS staff with a UK student loan repay 9% of income above the relevant threshold (6% for postgraduate loans) through PAYE deductions on their NHS payslip. The threshold and write-off rules depend on which plan you are on, which depends on when and where you studied.
Repayment thresholds for 2025/26
| Plan | Threshold | Rate | Write-off |
|---|---|---|---|
| Plan 1 | £26,065 | 9% of income above the threshold | 25 years after first repayment due date |
| Plan 2 | £28,470 | 9% of income above the threshold | 30 years after first repayment due date |
| Plan 4 | £32,745 | 9% of income above the threshold | 30 years after first repayment due date |
| Plan 5 | £25,000 | 9% of income above the threshold | 40 years after first repayment due date |
| Postgraduate Loan | £21,000 | 6% of income above the threshold | 30 years after first repayment due date |
Thresholds are reviewed annually. Source: GOV.UK student loan repayment guidance.
Which plan are you on
The plan you repay under depends on when and where you started your course. Plan 1 covers pre-2012 English and Welsh students plus the ongoing schemes for Scotland and Northern Ireland. Plan 2 covers English and Welsh students who started between 2012 and 2023. Plan 4 covers Scottish students from 1998. Plan 5 covers English students who started from 1 August 2023. Postgraduate Loan covers Master's and Doctoral loans from the Student Loans Company.
Many NHS nurses, AHPs and pharmacists have a mix: an undergraduate loan from their first degree plus a postgraduate loan from a Master's-level qualification. Both are repaid alongside each other through PAYE, with separate calculations for each loan.
How the deduction is calculated
Student loan repayments are deducted from gross pay through PAYE, alongside income tax and National Insurance. The calculation is straightforward: 9% (or 6% for postgraduate loans) of the portion of your monthly gross earnings that exceeds the monthly equivalent of the annual threshold.
Crucially, the threshold is applied month by month, not on annualised earnings. So a Band 6 nurse who picks up an extra bank shift in one month earning £4,000 instead of the usual £3,200 will see a higher student loan deduction that month, even if their annual earnings stay below the threshold for the rest of the year. The Student Loans Company reconciles any over- or under-payment at the end of the tax year and refunds overpayments.
NHS pension contributions and student loan
Student loan repayments are calculated on gross pay before NHS Pension contributions are taken. So a Band 6 staff nurse paying 9.8% into the pension still has their student loan deducted on the full salary, not the salary after pension. This is different from income tax, which is calculated after pension contributions because the NHS Pension Scheme is a 'net pay' arrangement.
Salary sacrifice schemes such as Cycle to Work or workplace nursery vouchers do reduce gross pay for student loan purposes, because they are technically reducing your contractual salary in exchange for the benefit. The reduction is usually small in the context of a full year of earnings but it can be worth modelling if you are close to the threshold.
Bank shifts, agency and second jobs
Earnings from your substantive NHS contract are aggregated for student loan purposes within that one employment. NHS Bank shifts paid through a separate Bank contract are usually treated as a separate employment for PAYE purposes, with the threshold applied independently. This sometimes means a member of staff doing bank shifts on top of a substantive contract sees no student loan deduction on the bank pay even though their combined annual earnings are above the threshold.
The Student Loans Company reconciles the position at year-end using Self Assessment if appropriate. If you regularly have multiple employments and your combined earnings are above the threshold, it is worth checking your end-of-year position to avoid a surprise demand.
Common questions
- How does student loan repayment work for NHS staff?
- Student loan repayments are deducted directly from your NHS payslip alongside income tax and National Insurance. The amount depends on which plan you are on and how much you earn above the relevant threshold. You repay 9% of income above the threshold (6% for postgraduate loans). The deduction is automatic and shows on your payslip as 'Student Loan' or 'SLC'.
- Which student loan plan am I on?
- It depends on when and where you started your course. Plan 1 covers pre-2012 starters in England and Wales (and ongoing Scottish and NI schemes). Plan 2 covers 2012 to 2023 starters in England and Wales. Plan 4 covers Scottish students from 1998. Plan 5 covers English students from 2023 onwards. Postgraduate loans run on their own plan with a different threshold and rate. The Student Loans Company can confirm your plan if you're not sure.
- Do unsocial hours and bank shifts count for student loan repayments?
- Yes. All earnings from your NHS contract, including basic pay, London weighting (HCAS), unsocial hours premia and any overtime, count towards your monthly repayment threshold. NHS Bank shifts paid through a separate Bank contract count separately because they are processed as a separate employment for tax purposes.
- Can I have multiple student loan plans?
- Yes. If you took out an undergraduate loan and then a postgraduate loan, you repay both alongside each other. The postgraduate loan threshold of £21,000 applies independently of the undergraduate threshold, so a Band 7 nurse with both loans pays 9% on income above £28,470 (Plan 2) plus 6% on income above £21,000 (PGL) at the same time.
- Are NHS Pension contributions deducted before student loan?
- No. Student loan repayments are calculated on gross pay before NHS Pension contributions are taken. So a Band 6 nurse paying 9.8% into the pension still has their student loan repayment calculated on the full salary, not the salary after pension. Tax-free salary sacrifice schemes (like the Cycle to Work scheme) do reduce your gross pay and so do reduce student loan repayments.
- What happens to my student loan if I leave the NHS?
- Your repayment plan and balance are unaffected. If you move to another UK employer, deductions continue through PAYE. If you go self-employed, you repay through Self Assessment annually. If you leave the UK, you have to notify the Student Loans Company directly and set up a repayment schedule based on the cost of living in your new country.
- Should NHS staff overpay their student loan?
- Usually not. Most graduates do not repay their full balance before the write-off date, so voluntary overpayments simply benefit the government rather than reducing your future cost. The exceptions are very high earners (specialist doctors, senior managers) who will repay in full anyway, where overpaying can reduce interest. The Money and Pensions Service offers a free student loan repayment calculator to model your specific situation.