Student Loan During a PhD — Repayments, Stipends and Funding

Do You Repay Student Loans During a PhD?

One of the most common financial questions prospective PhD students ask is whether they will have to keep repaying their undergraduate student loan while studying for a doctorate. The answer depends almost entirely on one thing: your taxable income. Student loan repayments in the UK are collected through the PAYE tax system (or via self-assessment for the self-employed). If your taxable income exceeds your plan's repayment threshold, repayments are due. If it does not, you pay nothing — regardless of whether you are studying, working or doing both.

The critical distinction for PhD students is between stipend income and employment income. Most funded PhD students receive a stipend rather than a salary, and the tax treatment of these two income types is very different.

PhD Stipends Are Tax-Free

The majority of fully funded PhD positions in the UK come with a stipend provided by a research council (such as UKRI — UK Research and Innovation), a university, a charity or an industry sponsor. These stipends are classified as bursaries or maintenance awards, not as employment income. As such, they are exempt from income tax and National Insurance contributions.

Because student loan repayments are calculated on taxable income, a tax-free stipend does not count towards the repayment threshold. A PhD student whose only income is a standard UKRI stipend of approximately £19,237 per year (2026/27 rate) would owe zero student loan repayments for the duration of their studies. This is true even though the stipend exceeds the Postgraduate Loan threshold of £21,000 — wait, it doesn't in this case, but even if it did, the stipend is not captured by HMRC because it is not taxable income. The repayment system simply never sees it.

This is a significant financial benefit. A three- or four-year PhD effectively provides a repayment holiday on your undergraduate loan. During that time, however, interest continues to accrue on your outstanding balance. For a Plan 2 borrower, interest during study is set at the highest rate tier (RPI + 3%), which in 2026/27 could be as high as 6.2%. For a full explanation of how interest works, see our dedicated guide. Plan 1 and Plan 4 borrowers face a lower interest rate of 3.2%, and Plan 5 borrowers are capped at the RPI rate of around 3.2% as well.

The UKRI Stipend in Detail

The UK Research and Innovation minimum doctoral stipend for 2026/27 is approximately £19,237 per year (tax-free). This is the baseline that most research councils set, although individual universities and funders may offer more. Some institutions in London add a London weighting of £2,000 to £3,000, bringing the stipend to around £21,000 to £22,000. Even with the London uplift, the stipend remains tax-free and does not trigger student loan repayments.

It is worth noting that the UKRI stipend has increased in recent years to keep pace with the cost of living. The tax-free status means the stipend's purchasing power is somewhat greater than an equivalent gross salary, because no income tax, no National Insurance and no student loan repayments are deducted. A gross salary of £19,237 for someone on Plan 2 with a student loan would yield significantly less take-home pay.

Teaching Alongside a PhD

Many PhD students supplement their stipend by teaching undergraduates. Universities typically pay doctoral researchers an hourly rate for demonstrating in labs, leading seminars or marking coursework. This pay is classified as employment income — it goes through PAYE, is subject to income tax and National Insurance, and counts towards student loan repayment thresholds.

If your teaching income alone (or combined with any other taxable employment) exceeds the repayment threshold, your employer will deduct student loan repayments via PAYE. For Plan 2 borrowers, the threshold is £29,385. Most PhD students who teach earn a few thousand pounds per year from teaching — typically between £1,500 and £5,000 depending on the department and hours — which is well below the annual threshold. However, if you have additional part-time employment that, combined with teaching income, pushes you above the threshold, repayments will apply to the excess.

An important practical point: because student loan repayments through PAYE are calculated per pay period, if you receive a lump-sum payment for teaching in a single month that appears to annualise above the threshold, your employer may deduct student loan repayments for that month even though your annual total is below the threshold. You can reclaim any overpayment at the end of the tax year by contacting HMRC or via your self-assessment tax return.

When Undergraduate Loan Repayments Apply During a PhD

To summarise the situations in which you would make repayments on your undergraduate loan during a PhD:

• You have taxable employment income above the threshold — for example, a part-time or full-time job alongside your studies, or a salaried PhD position (some industry-funded PhDs are structured as employment contracts).
• You are on a salaried PhD programme — certain doctoral training centres, particularly those linked to industry, pay a salary rather than a stipend. A salary is taxable and would trigger student loan repayments if it exceeds the threshold.
• You have self-employment income above the threshold — if you do freelance consulting, tutoring or other self-employed work that breaches the annual threshold, you will owe repayments via self-assessment.

If your only income is a tax-free stipend, you will make no repayments. You do not need to apply for a deferral or take any action — the system handles it automatically because there is no taxable income for HMRC to apply the repayment percentage to.

The Doctoral Loan — Separate from Your Stipend

Since 2018/19, the UK government has offered a Doctoral Loan through the Student Loans Company (SLC) for students undertaking a doctoral programme. This is a contribution towards course fees and living costs, currently up to £31,122 paid over the duration of the programme (usually three to four years). The Doctoral Loan is available to students who do not already have a doctoral-level qualification, regardless of whether they receive a stipend.

The Doctoral Loan is classified as a Postgraduate Loan. It has its own repayment terms: a threshold of £21,000, a repayment rate of 6% of income above that threshold, an interest rate of approximately 6.2% (RPI + 3%), and a 30-year write-off period. For more on maximum borrowing amounts, see our guide on how much student loan you can get.

A key point: the Doctoral Loan is separate from your undergraduate loan. If you have a Plan 2 undergraduate loan and you take out a Doctoral Loan, you will have two independent repayment obligations once you are earning. Each loan's repayment is calculated independently against its respective threshold and rate.

Holding Plan 2 and a Postgraduate Loan Simultaneously

After completing a PhD, many graduates enter careers where they earn above both thresholds. Understanding how dual repayment works is crucial for budgeting. If your annual taxable income is, say, £40,000, your repayments would break down as follows:

• Plan 2: 9% of (£40,000 − £29,385) = 9% of £10,615 = £955 per year (about £80 per month).
• Postgraduate Loan: 6% of (£40,000 − £21,000) = 6% of £19,000 = £1,140 per year (about £95 per month).
• Total: approximately £2,095 per year or £175 per month.

That is a combined deduction rate of effectively 15% of income above the higher threshold (since both apply above £29,385), plus 6% on the band between £21,000 and £29,385 where only the postgraduate repayment bites. You can model your own scenario with our student loan calculator. For teachers with dual loans, see our specific guide to student loan repayments for teachers.

Part-Time PhD and Student Loan Repayments

Part-time PhD students often continue working in full-time or part-time employment while studying. If your employment income exceeds the repayment threshold, you will continue making student loan repayments as normal through PAYE. The fact that you are also a registered student does not grant you any exemption or deferral from repayments — the system looks solely at your taxable income.

There was a common misconception in the past that registering as a student would automatically pause repayments. This has not been the case since the introduction of income-contingent repayments. If you earn above the threshold, you repay. If you earn below it, you do not. The only time "student status" matters for repayment purposes is if you need to inform the SLC that you are still studying to prevent them from chasing repayments on a previous loan while you are still in a course for which that loan was issued — but even this applies to undergraduate loans during undergraduate study, not to undergraduate loans during doctoral study.

Interest Accumulation During a PhD

Even if you make no repayments during your PhD, interest continues to accrue on your outstanding undergraduate loan balance. For Plan 2 borrowers, the interest rate while studying is RPI + 3%, which is the highest tier. At an RPI of 3.2% and a maximum rate of 6.2%, a typical Plan 2 balance of £50,000 would accumulate roughly £3,100 in interest in a single year. Over a three-year PhD, that compounds to over £9,900 in additional interest — potentially pushing your balance to over £60,000 before you even start repaying.

For many borrowers, this sounds alarming, but context is important. If you are unlikely to repay the full balance within 30 years anyway (as is the case for most Plan 2 borrowers on average salaries), the additional interest accumulated during a PhD is largely academic — it increases a balance that will ultimately be written off. The key metric is not the total balance but the total amount you repay over the loan's lifetime, which is determined solely by your income and the repayment term. Read more about how interest works in our interest calculation guide.

Should You Voluntarily Repay During a PhD?

In almost every case, no. Making voluntary repayments during a PhD on a tax-free stipend would mean using your limited living funds to reduce a debt that may well be written off in the long term. Unless you are in the unusual position of having a small remaining balance that you can clear entirely, voluntary repayments are unlikely to save you money overall.

The exception might be Plan 1 borrowers with smaller balances and lower interest rates (3.2%), who have a realistic chance of repaying in full within 25 years. For them, reducing the balance during a PhD could save on interest. But for the majority of Plan 2 and Postgraduate Loan holders, the mathematics do not support voluntary overpayment. Check your balance and projected repayments using our guide on how to check your student loan balance.

Key Takeaways

A funded PhD with a standard stipend provides an effective repayment holiday on your undergraduate student loan. Your stipend is not taxable, so the repayment system does not see it. Interest will continue to accrue, but for most borrowers this does not change the total they will repay over the life of the loan. If you take out a Doctoral Loan, be aware that it creates a second, independent repayment obligation once you are earning. And if you teach or work alongside your PhD, keep track of your taxable income to avoid surprises at the end of the tax year. For a broader understanding of how student loan interest compounds, visit our detailed article on how student loan interest is calculated.