Postgraduate Loans help cover the cost of a Master's or Doctoral degree in the UK, and they run on separate rules from undergraduate student loans — a separate threshold, a separate repayment rate, and their own write-off period. If you have both types of loan at once, understanding how they interact matters for your take-home pay.
What a Postgraduate Loan covers
Postgraduate Master's Loans and Postgraduate Doctoral Loans are paid to help with course fees and living costs while you study, rather than being paid directly to your university in the way some undergraduate tuition funding works. You typically receive the loan in instalments and can choose broadly how to allocate it between fees and living expenses.
Eligibility
Broadly, eligibility depends on factors including your age, nationality or residency status, whether you've studied at that level before, and the type of course. As with undergraduate loans, the detailed criteria are set by the relevant UK student finance body and can change, so it's worth checking current eligibility rules directly before assuming you do or don't qualify.
How repayment works
Postgraduate Loan repayments use their own income threshold, separate from the undergraduate thresholds, and are typically charged at a lower percentage of income above that threshold than undergraduate Plan loans. Like undergraduate loans, repayments are collected automatically through the tax system if you're employed, or through Self Assessment if you're self-employed, and any remaining balance is written off after a set number of years from when you became eligible to repay.
Repaying both an undergraduate and postgraduate loan together
This is the part that catches many borrowers out. If you have an undergraduate loan (say, Plan 2 or Plan 5) and a Postgraduate Loan at the same time, you don't just repay whichever one has the higher threshold — you repay both simultaneously, each calculated against its own threshold and rate, and the two deductions are added together.
Worked example
Suppose your income sits above both the undergraduate and postgraduate repayment thresholds. Your employer's payroll system will calculate the undergraduate repayment as a percentage of your income above the undergraduate threshold, and separately calculate the postgraduate repayment as a percentage of your income above the postgraduate threshold, then deduct both amounts from your pay in the same period. The two thresholds are different figures, so it's not a simple case of "the higher one applies" — both calculations run independently.
Interest and write-off
Interest accrues on a Postgraduate Loan from the time you take it out, at a rate set by the government (often linked to an inflation measure, sometimes with an additional margin during study). The write-off period for Postgraduate Loans differs from most undergraduate plans, so check the current rules for your specific loan rather than assuming it matches an undergraduate plan you might also hold.
Common mistakes
- Assuming a Postgraduate Loan repayment stops once your undergraduate loan is paid off — the two are independent and both continue until each is individually repaid or written off.
- Not checking your payslip carefully enough to notice two separate student loan deductions, which can look like a payroll error but usually isn't.
- Forgetting that voluntary overpayment decisions (see our guide on overpaying student loans) need to be assessed separately for each loan, since their thresholds, rates and write-off dates differ.
What to do next
If you're considering postgraduate study and expect to still be repaying an undergraduate loan afterwards, model your likely combined repayments against your expected postgraduate salary before committing, so the numbers don't come as a surprise once you're working.