Triple plan repayment?? repayments on plan 2, PG, AND plan 5??

cheesetax

Hi all!

A conundrum.. can't seem to find any info on it online.

I did my undergraduate under a plan 2 loan. Will never repay in full, its sat at ~£60k. I've just finished a masters, PG loan currently at £9250, have been making voluntary repayments as have plenty in savings and anticipate to repay before it wipes even on a £30k salary, and didn't fancy the double wammy of 2 separate loan plan deductions both at different thresholds (PG threshold is super low at £21,000). Currently have a £31k salaried job, but have been considering a PGCE. Does this mean that my PGCE would be on plan 5, despite my undergrad being on plan 2, and also holding a Master's loan? This would in effect mean 3 separate repayments all on top of each other??? And so, on 21k to 25k 6% grad tax (masters), 25k to 27k 15% grad tax (6 masters +9 plan 5), and 27k+ 24% (6 masters +9 plan 5 +9 plan 2)? So messed up. Is there a system in place for these kind of scenarios? I am aware of other funding possibilities for PGCE's, but the availability of bursaries changes every year for different subjects. Just curious as to how this would work in principle, having 3 separate loan plans and how the repayments would work, effective marginal tax rate etc...?

silvercar

My understanding is that the pgce would be on plan 5, but your repayments would be limited to 6+9. Your 9 part going to repay either your plan 2 or your plan 5. You wouldn’t be double charged.

silvercar

Found the official answer from another poster on another thread:

This person had loans on plan 1, plan 2 and was contemplating a pgce. Once you reach a threshold for a particular plan type then all repayments from earnings above that threshold go to that plan type, until a higher threshold is reached for a different plan type.

Example 1

If you have a Plan 2 and a Plan 5 loan that are both in repayment (note Plan 5 can't enter repayment until April 2026 at the earliest), and you earn £30,000 then:
• 9% of income between £25,000 (Plan 5 threshold) and £27,295 (Plan 2 threshold) goes to the Plan 5 loan, and
• 9% of income over £27,295 (Plan 2 threshold) goes to the Plan 2 loan.

Example 2

If you have a Plan 1, Plan 2 and a Plan 5 loan that are all in repayment (note Plan 5 can't enter repayment until April 2026 at the earliest), and you earn £30,000 then:
• 9% of income between £22,015 (Plan 1 threshold) and £25,000 (Plan 5 threshold) goes to the Plan 1 loan,
• 9% of income between £25,000 (Plan 5 threshold) and £27,295 (Plan 2 threshold) goes to the Plan 5 loan, and
• 9% of income over £27,295 (Plan 2 threshold) goes to the Plan 2 loan.