Student loan Plan 4 (Scotland)

Plan 4 is the repayment plan for student loans taken out by students from Scotland. For 2026/27 you repay 9% of your earnings above £33,795 a year, which payroll applies as £2,816.25 a month or £649.90 a week. It has the highest threshold of any UK undergraduate plan, so many people early in their careers repay little or nothing. Interest on Plan 4 was 4.1% on gov.uk at the time of checking.

Who is on Plan 4

You are on Plan 4 if you were a student from Scotland and your tuition and living cost loans came through the Student Awards Agency Scotland (SAAS). It applies whether you studied in Scotland or elsewhere in the UK, and whether you now work in Scotland or somewhere else. Older Scottish loans were moved onto Plan 4 when it was created, so most Scottish borrowers of any age are on it.

If you have a Postgraduate Loan from SAAS for a master’s course, check your Student Loans Company account, because Scottish postgraduate tuition fee loans are treated as part of your Plan 4 borrowing rather than as a separate Postgraduate Loan. The account shows exactly what you hold.

What it costs on Scottish public sector pay

Scottish pay scales are higher than England’s for many public sector jobs, so it is worth looking at real Scottish figures. All are full-time 2026/27 rates and assume Plan 4 only.

Salary	Example post	Over £33,795	Per year	About a month
£31,492	NHS Scotland band 4 entry	nothing	£0	£0
£34,494	NHS Scotland band 5 entry	£699	£62.91	£5
£36,159	Probationer teacher (from 1 August 2026)	£2,364	£212.76	£18
£43,383	Teacher, bottom of main grade	£9,588	£862.92	£72

A band 5 nurse in NHS Scotland starting in 2026/27 repays only a few pounds a month, while a teacher who has moved up the main grade repays significantly more. For the NHS Scotland bands and teacher scales in full, see teacher pay in Scotland and public sector jobs in Scotland.

How the deduction is calculated

Payroll takes your gross pay for the period, subtracts the Plan 4 threshold for that period and takes 9% of the rest. It is calculated on each payday by itself, not across the tax year. A month with overtime, extra shifts or back pay from a pay award gives a larger deduction, and a month of low pay gives none.

If your total income for the tax year ends up below £33,795, you can ask the Student Loans Company to refund what was taken.

Contributions to the NHS Pension Scheme in Scotland, the Scottish Teachers’ Pension Scheme or the Local Government Pension Scheme do not reduce the pay used for this calculation. Salary sacrifice arrangements do, because they reduce your contractual pay.

The combined rate on extra pay

Scottish taxpayers above £43,663 pay income tax at 42%, while employee National Insurance stays at 8% up to £50,270. Add a 9% Plan 4 repayment and each extra pound earned between £43,663 and £50,270 leaves you with 41p before pension contributions. Above £50,270, NI drops to 2%, so you keep 47p until the next tax band. Scottish S tax codes and rates shows the bands, and the take-home pay calculator puts them together.

Plan 4 with other loans

If you also have a Plan 1 or Plan 2 loan (for example from a course funded in England or Northern Ireland before you moved to Scotland), you repay 9% in total, starting from the lowest threshold that applies, and the Student Loans Company splits it between the plans. You never pay 9% twice.

A separate Postgraduate Loan from England or Wales is repaid at 6% above £21,000 on top of your Plan 4 deduction. Student loan repayments from salary covers the combinations.

Interest and write-off

Interest is added to your balance and does not change your monthly deduction. The rate was 4.1% at the time of checking; it changes during the year, so look up the current one.

Plan 4 loans are written off after a set period or at a set age depending on when you took them out, and on death or permanent disability. The Student Loans Company terms and conditions on gov.uk give the rule for your loan, and your online account shows the expected date.

If the deduction looks wrong

A common mistake is payroll applying Plan 1 or Plan 2 when you are on Plan 4. Because those thresholds are lower, you end up repaying far more than you should: on £34,494, Plan 2 would take £459.81 a year instead of £62.91. Check the plan type on your payslip. If it is wrong, tell payroll and the Student Loans Company, and ask for a refund of the overpayment.