Plan 4 Student Loan Calculator
Plan 4 is for Scottish students. It has the highest repayment threshold of the standard plans at £33,795.
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Complete Guide to Plan 4 Student Loans (Scotland)
Plan 4 is the student loan repayment plan for borrowers who studied in Scotland. It was created to replace the older Plan 1 arrangement for Scottish students and has been in effect since April 2021. If you took out a student loan for a course in Scotland on or after 1 September 1998, you are on Plan 4.
Scotland's higher education funding model differs significantly from England's. Scottish-domiciled students studying at Scottish universities have their tuition fees paid directly by the Student Awards Agency Scotland (SAAS), meaning they typically only borrow for living costs through maintenance loans. As a result, Plan 4 loan balances are generally much lower than those of Plan 2 borrowers in England, often ranging from £5,000 to £25,000 depending on the length of the course and living arrangements.
Who Has a Plan 4 Loan?
You have a Plan 4 loan if any of the following apply:
- Scottish students who started a higher education course on or after 1 September 1998
- EU students who studied in Scotland from September 1998
- Borrowers who previously had a Scottish Plan 1 loan — these were automatically transferred to Plan 4 in April 2021
If you are English, Welsh, or Northern Irish and studied at a Scottish university, your plan depends on your home country, not where you studied. Use our which plan am I on? guide if you are unsure.
Key Plan 4 Facts for 2026/27
- Annual repayment threshold: £33,795 per year (£2,816.25 per month, or £650 per week)
- Repayment rate: 9% of your gross income above the threshold
- Interest rate: 3.2% (set as the lower of RPI or Bank of England base rate + 1%)
- Write-off period: 30 years after the April you were first due to repay (or age 65 for pre-2007 loans)
- Collection method: PAYE (automatic) or Self Assessment if self-employed
Why Plan 4 Has the Highest Threshold
At £33,795 per year, Plan 4 has the highest repayment threshold of any standard UK student loan plan. This means Scottish graduates do not start repaying until they earn well above the UK median full-time salary (approximately £34,000). To put this in perspective:
- Plan 1: Threshold of £26,900 — you start repaying £6,895 sooner
- Plan 2: Threshold of £29,385 — you start repaying £4,410 sooner
- Plan 5: Threshold of £25,000 — you start repaying £8,795 sooner
- Postgraduate: Threshold of £21,000 — you start repaying £12,795 sooner
The higher threshold, combined with typically smaller balances (because tuition is covered by SAAS), means many Plan 4 borrowers have particularly affordable repayment obligations. A Scottish graduate earning £35,000 would repay just £108.45 per year (£9.04 per month) — a far smaller burden than their English counterparts.
How Plan 4 Interest Works
Plan 4 uses the same interest formula as Plan 1: the lower of either the Retail Prices Index (RPI) rate of inflation, or the Bank of England base rate plus 1 percentage point. For 2026/27, this rate is 3.2%. Unlike Plan 2, there is no sliding scale based on income — all Plan 4 borrowers pay the same rate regardless of their earnings.
This flat, relatively low rate means Plan 4 balances grow slowly. Combined with the smaller original balances typical of Scottish borrowers, many Plan 4 loans are realistically repayable within the 30-year window. For the full history and explanation of how interest rates are set, see our interest rates explained guide.
Repayment Examples at Different Salaries
| Annual Salary | Income Above Threshold | Annual Repayment | Monthly Repayment |
|---|---|---|---|
| £30,000 | £0 (below threshold) | £0 | £0 |
| £35,000 | £1,205 | £108.45 | £9.04 |
| £40,000 | £6,205 | £558.45 | £46.54 |
| £50,000 | £16,205 | £1,458.45 | £121.54 |
| £60,000 | £26,205 | £2,358.45 | £196.54 |
| £80,000 | £46,205 | £4,158.45 | £346.54 |
Plan 4 Write-Off Rules
Plan 4 loans are written off 30 years after the April you were first due to repay. For most borrowers, this is 30 years after the April following graduation. However, there is an important exception: if you took out your Scottish student loan before September 2007, your loan is written off when you reach age 65 instead. This older cohort may have a longer or shorter repayment window depending on their current age.
The write-off is automatic, tax-free, and requires no action from you. Any remaining balance is simply cancelled. For full details on write-off rules across all plans, read our guide on when your student loan is written off.
Scottish Students and SAAS
One of the key advantages of studying in Scotland as a Scottish student is that the Student Awards Agency Scotland (SAAS) covers your tuition fees. This means your student loan borrowing is limited to maintenance (living cost) loans, which typically range from £5,750 to £8,400 per year depending on your circumstances and whether you live away from home. Over a typical four-year Scottish degree, this results in a total loan of £23,000 to £33,600 — substantially less than the £50,000+ typical for English Plan 2 graduates.
Should Plan 4 Borrowers Overpay?
Because Plan 4 balances tend to be smaller and the interest rate is low, a higher proportion of Plan 4 borrowers will repay in full before write-off compared to Plan 2 borrowers. If the calculator above shows that you would repay in full, overpaying could save you money on interest. However, you should still consider whether the money could work harder elsewhere:
- At 3.2% interest, any savings account or investment earning more than 3.2% would be more beneficial
- Employer-matched pension contributions typically offer a 100% return — far better than saving 3.2%
- Clear any higher-interest debt (credit cards, overdrafts) before considering student loan overpayments
Use our early repayment calculator to model the exact impact of voluntary overpayments on your Plan 4 loan. Our should I repay early? guide provides detailed analysis.
Plan 4 and Working in England (or Vice Versa)
Your repayment plan is determined by where and when you studied, not where you work. If you are a Scottish graduate working in England, you are still on Plan 4 with the £33,795 threshold. Your English employer will deduct repayments based on Plan 4 rules — HMRC tells them which plan applies via your tax code. Similarly, if an English graduate works in Scotland, they remain on their original plan (Plan 1, 2, or 5).
Salary Sacrifice and Plan 4
If your employer offers salary sacrifice pension contributions, these reduce your gross salary before student loan deductions are calculated. For Plan 4 borrowers who would have their loan written off, this is doubly beneficial — you build your pension while reducing payments on debt that would be cancelled. Even for those who will repay in full, salary sacrifice still offers a net benefit if your employer matches contributions, as the pension growth typically outweighs the additional interest paid on a slower-repaying loan. Read our salary sacrifice guide for details.
Related calculators and guides: Which plan am I on? · How repayments work · Compare plans · Plan 1 calculator · Plan 2 calculator · Early repayment calculator