The Junior Doctor's Guide to Student Loans

Many doctors would have had to use a student loan to study medicine for 5 or 6 years. In this article, we will discuss the terms of your loan.

Student loans are divided into two parts:

  • Tuition fee loan: Paid directly to the university
  • Maintenance loan: Paid to you for living costs

Student Loan Plans

Plan 1 (Started before September 2012)

  • Repayment threshold: £22,015 (2025-26)
  • Repayment rate: 9% above threshold
  • Interest rate: Currently 1.75%
  • Written off: After 25 years

Plan 2 (Started September 2012 or later)

  • Repayment threshold: £27,295 (2025-26)
  • Repayment rate: 9% above threshold
  • Interest rate: RPI + up to 3% (complex calculation)
  • Written off: After 30 years

Most junior doctors are on Plan 2 as tuition fees increased from ~£3,500 to £9,000 in 2012.

How Repayments Work

You pay 9% of income above the threshold. Repayments are made through HMRC and deducted from your salary automatically.

Important Changes

  • After April 2019, loan balance updates became more frequent
  • Interest rates are typically higher for Plan 2 loans
  • Plan 2 rates range from 3.9% to 6.6% based on RPI and income

Repayment Strategy

For some, "running down the clock" on loan repayment might be financially strategic, especially for Plan 2 loans.

Consider:

  • Your total debt amount
  • Expected career earnings trajectory
  • Interest rates vs investment returns
  • Time to loan write-off

Note: Student loan repayment strategy is complex and personal. Consider speaking to a financial advisor for advice specific to your situation.

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