Plan 4 Student Loan Repayment: The Scottish Guide

Scottish graduates repay student loans under Plan 4 — a system that differs significantly from the English plans in ways that are almost always more favourable. Most UK student finance content ignores Plan 4 entirely or lumps Scotland in with England. Here's the accurate picture.

Who is on Plan 4?

You are on Plan 4 if you are Scotland-domiciled and received a student loan from SAAS (Student Awards Agency for Scotland). This applies regardless of which UK country you studied in — if SAAS paid your loan, you repay under Plan 4.

Scottish students who studied in England and took a loan from Student Finance England are on Plan 2 (if they started before August 2023) or Plan 5 (if they started from August 2023 onwards). In that case, English repayment rules apply. This is an important distinction — check your loan documentation or HMRC records if you're unsure which plan you're on.

The 2026/27 repayment threshold

Plan 4 has the highest repayment threshold of any UK student loan plan. This means Scottish graduates start repaying later — at a higher income level — than graduates on other plans.

How repayments are calculated

You repay 9% of everything you earn above the threshold. Nothing below the threshold is ever repayable.

Example: earning £40,000/year on Plan 4

• Income above threshold: £40,000 − £31,395 = £8,605
• Annual repayment: 9% × £8,605 = £774.45/year
• Monthly deduction: £64.54/month

Example: earning £28,000/year on Plan 4

• Income is below the £31,395 threshold
• Annual repayment: £0

Repayments are collected through PAYE (if employed) or self-assessment (if self-employed). You don't manually send money — HMRC deducts it automatically.

Interest rate

Plan 4 interest is set at the lower of:

• RPI (Retail Price Index) inflation, or
• Bank of England base rate + 1%

This cap makes Plan 4 interest significantly lower than Plan 2 interest (which can reach RPI + 3%) and Plan 5 interest (RPI). During periods of high inflation, Plan 4 graduates benefit most from the base rate cap.

In practice, this means Plan 4 loans grow more slowly than English equivalents during high-inflation periods — though if income is below the threshold throughout, interest accumulation matters less because the loan is written off regardless.

When does the loan get written off?

Plan 4 loans are written off 30 years after the April following the end of your course. For a student who finishes in June 2026, the clock starts April 2027 — write-off in April 2057.

Any remaining balance at the 30-year mark is cancelled by HMRC with no tax implication. You do not inherit any residual debt.

Plan 4 vs Plan 2 vs Plan 5: side by side

The most striking difference is the maximum tuition debt: Scottish graduates at Scottish universities borrow nothing for tuition — SAAS pays the £1,820 fee directly to the university. The only SAAS loan is for living costs (maintenance). Compare this to English graduates who may borrow £9,535/year in tuition fees alone, on top of maintenance.

Checking which plan you're on

If you're unsure, log into your HMRC Personal Tax Account at gov.uk/personal-tax-account. Under "Student loan repayments" you'll see which plan type is recorded for you. If it shows incorrectly, contact SAAS (for pre-repayment queries) or HMRC (for in-repayment queries).

For full detail on SAAS — how much you can borrow, income thresholds, and what's repayable vs non-repayable — see the SAAS student finance guide.