Student loans: Scotland

11 need-to-knows for Scottish students taking out 'Plan 4' loans

Student loans in Scotland work differently to the rest of the UK. If you normally live in Scotland and decide to go to university, there are 11 key things you need to know about how 'Plan 4' student finance works – even if you study elsewhere in the UK.


This is the first iteration of this guide. If you've feedback, let us know in the Plan 4 forum thread.

Is this the right guide for you? This guide explains how student loans work if you're Scottish, regardless of where in the UK you go to study. If you don't live in Scotland, you're in the wrong place – see Which student loan am I on?

  1. You don’t need to pay upfront to go to uni, and how much you repay is income-based

    You don’t need to pay a penny upfront to go to university, so no one should be put off from going because they think they can't afford it.

    You can get a student loan to cover tuition fees (if any are payable, see point 2) as well as your student living costs (called a maintenance loan). The latter is means-tested with parents expected to fill any shortfall (see point 6.)

    You'll only start repaying these loans after you leave university and, even then, only once you're earning enough (see point 3).

    So, what matters in practical terms is how much you have to repay, which can be a different number from the total amount of tuition fees, maintenance loan and interest. That said, if you're keen to minimise the size of your student loan, you may want to consider staying in Scotland to study...

  2. You'll need a bigger loan to study outside Scotland

    If you ordinarily live in Scotland and choose to go to university there to study an undergraduate degree, you're likely to be eligible for a tuition fee-waiver. If so, the Students Award Agency for Scotland (SAAS) will pay your tuition fees directly to your chosen uni – meaning you don't have to pay anything.

    It's not a loan, so it WON'T have to be repaid. To get the fee-waiver, you just have to apply to SAAS before the start of each year of your course. Not having to pay tuition fees makes uni in Scotland a lot cheaper than elsewhere in the UK (though you may have one more year of living costs to pay for, as uni courses in Scotland are usually four years rather than the standard three years elsewhere in the UK).

    If you do choose to study in England, Wales or Northern Ireland, you’ll still need to apply to SAAS for your funding and you'll still be on the Scottish Plan 4 system for repayments, but you'll need to take out a significantly bigger student loan to cover tuition fees, which are often as much as £9,250/year.

    Crucially, a bigger loan WON'T increase your monthly repayments (see the point below for why). But it does mean that once you're earning enough to start making repayments, you'll have to make them for longer in order to clear the loan.

    And if you study elsewhere in the UK, you may receive a smaller loan to cover your living costs than many of your non-Scottish peers – see point 6 below for more.

    • If you're a part-time student...

      Part-time students make up roughly 25% of Scottish undergraduates. As with full-time undergraduates, the SAAS offers a part-time fee waiver to help pay for your tuition fees (as long as you're going to be studying in Scotland). And as with full-time students, this doesn't have to be repaid.

      How much you can get depends on what you're studying and the number of credits you do each year, compared to a full-time course. The maximum amount SAAS will pay is £1,805 a year and generally you have to be studying less than 120 a credits a year to be eligible. The SAAS provide a handy calculator so you can get an idea of what funding you might get.

  3. You repay 9% of everything earned above £31,395/year – earn less and you don't repay

    Once you leave university, you only repay your undergraduate student loan when you're earning above £2,616/month - equivalent to £31,395/year and then it's fixed at 9% of everything you earn above that.

    So, how much you owe has no bearing on how much you repay, as your repayments are based SOLELY on how much you earn. So...

    • If you earn £35,000/year and owe £20,000, you'll repay £324/year. 
    • If you earn £35,000/year and owe £50,000, you'll repay £324/year.
    • And, if you earn £35,000/year and owe £100,000, you'll still only repay £324/year.

    If you've started repaying the loan and then get a pay rise, you'll pay more of your student loan off each month. But in the same way, if you lose your job or take a pay cut, your repayments drop accordingly.

    But it's worth mentioning that repayments are made monthly, so if your salary fluctuates each month, for example, due to bonuses and commissions, it may mean you'll have paid back more than 9% over the threshold in a year – sadly it's just how the system works.

    In simple terms, though, the general principal is that the more you earn, the more of your student loan you'll repay – as the table below shows.

    What you'll repay on a Plan 4 student loan

    Salary What you'll repay each year
    £20,000 £0
    £30,000 £0
    £40,000 £774
    £50,000 £1,674
    £60,000 £2,574
    £70,000 £3,474
    £80,000 £4,374
    £90,000 £5,274
    £100,000 £6,174

    Figures for repayments each year are only until either you've cleared your balance, or 30 years have passed, whichever is first. 

    Further info on repaying

    • What counts as additional income for student loan repayment purposes?

      If you have additional income of over £2,000 from savings interest, pensions or shares and dividends, this will also be treated as part of your income for repayment purposes. You'll need to repay 9% of that too via self-assessment.

    • Do I still have to repay my student loan if I move overseas?

      Yes. The student loan has been set up as a contract, not a tax. So the fact that you're no longer living in the UK doesn't affect that contract.

      The rules state you're still obliged to repay 9% of all earnings above the local equivalent £31,395/year (2024/25). Not doing so could lead to substantial penalties. And this local equivalent isn't just a currency translation, it factors in the cost of living in your country, so it can be radically different.

    • How do student loan repayments affect my pension contributions?

      You pay student loan repayments on the same income that your employer pays national insurance contributions on – so before tax and pension contributions are taken out. So, whether your pension scheme uses a net pay arrangement, or relief at source – either way the student loan is taken first. For more info on the different pension types see Pension need-to-knows.

    • When and how does the Plan 4 repayment threshold change?

      The repayment threshold for Plan 4 student loans changes on 6 April each year, in line average annual earnings. The table below shows how the threshold has increased over time.

      Plan 4 annual repayment threshold in previous years

      Date Annual repayment threshold
      6 April 2000 to 5 April 2005 £10,000
      6 April 2005 to 5 April 2012 £15,000
      6 April 2012 to 5 April 2013 £15,795
      6 April 2013 to 5 April 2014 £16,365
      6 April 2014 to 5 April 2015 £16,910
      6 April 2015 to 5 April 2016 £17,335
      6 April 2016 to 5 April 2017 £17,495
      6 April 2017 to 5 April 2018 £17,775
      6 April 2018 to 5 April 2019 £18,330
      6 April 2019 to 5 April 2020 £18,935
      6 April 2020 to 5 April 2021 £19,390
      6 April 2021 to 5 April 2022 £25,000
      6 April 2022 to 5 April 2023 £25,375
      6 April 2023 to 5 April 2024 £27,660
    • Part-time students might start repaying their loan while still studying

      Part-time students start repaying their student loan the earlier of the following, either:

      • The April after they finish their course, or
      • The April four years after they started the course.

      Because lots of part-time students do courses longer than four years, this means strangely in some cases they'll have to start repaying the loan in some cases while they're still studying. 

      But, importantly, part-time students still only repay if they're earning over the repayment threshold of £31,395. 

  4. The interest rate on your loan is currently 6.25%

    Interest starts being added to your student loan as soon as you (or your university) receive the money from the Student Loans Company.

    The interest rate you'll be charged is the LOWER of the following:

    Either: The Bank of England base rate plus 1%...

    Or: The rate of inflation. This is fixed for a year on 1 September based on the Retail Price Index (RPI) from the previous March, though the actual rate is only confirmed each August.

    The rate of inflation in March 2022 was 9%, which is more than the current Bank of England base rate plus 1%. As the base rate was 5.25% in August 2023, the current rate of interest is 6.25%.

    Remember, being charged interest isn't the same as needing to repay it, and the interest doesn't affect how much you repay each month.

    • Plan 4 interest rates in previous years

      The table below shows how the interest charged on Plan 4 loans has changed since 1998.

      Plan 4 interest rates in previous years

      Date Interest rate
      21 July 2023 to 31 August 2023 6%
      9 June to 20 July 2023 5.5%
      21 April to 8 June 2023 5.25%
      3 March to 20 April 2023 5%
      12 January to 2 March 2023 4.5%
      2 December to 11 January 2023 4%
      20 October to 1 December 2022 3.25%
      1 September to 19 October 2022 2.75%
      3 March to 31 August 2022 1.5%
      13 January to 2 March 2022 1.25%
      1 September 2021 to 12 January 2022 1.1%
      1 September 2020 to 31 August 2021 1.1%
      6 April to 31 August 2020 1.1%
      1 September 2019 to 5 April 2020 1.75%
      1 September 2018 to 31 August 2019 1.75%
      1 December 2017 to 31 August 2018 1.5%
      1 September to 30 November 2017 1.25%
      1 September 2016 to 31 August 2017 1.25%
      1 September 2015 to 31 August 2016 0.9%
      1 September 2014 to 31 August 2015 1.5%
      1 September 2013 to 31 August 2014 1.5%
      1 September 2012 to 31 August 2013 1.5%
      1 September 2011 to 31 August 2012 1.5%
      1 September 2010 to 31 August 2011 1.5%
      1 September 2009 to 31 August 2010 0.0%
      6 March to 31 August 2009 1.5%
      6 February to 5 March 2009 2.0%
      9 January to 5 February 2009 2.5%
      5 December 2008 to 8 January 2009 3.0%
      1 September to 4 December 2008 3.8%
      1 September 2007 to 31 August 2008 4.8%
      1 September 2006 to 31 August 2007 2.4%
      1 September 2005 to 31 August 2006 3.2%
      1 September 2004 to 31 August 2005 2.6%
      1 September 2003 to 31 August 2004 3.1%
      1 September 2002 to 31 August 2003 1.3%
      1 September 2001 to 31 August 2002 2.3%
      1 September 2000 to 31 August 2001 2.6%
      1 September 1999 to 31 August 2000 2.1%
      1 September 1998 to 31 August 1999 3.5%
  5. What's left of your loan after 30 years is wiped

    After you leave university, you'll keep making student loan repayments until you've either finished paying back the loan, or until 30 years have passed since the April after you left uni – whichever happens first.

    So if you leave university and never earn above the repayment threshold (currently £31,395/year), after 30 years the entirety of your loan as well as any interest will be completely wiped.

    The only exception to this is if you took out a student loan in or before 2006. In which case, anything you haven't paid back is written off when you either reach 65 or after 30 years – whichever is sooner.

    All 'Plan 4' loans are also wiped if you're permanently disabled in such a way that you'll be permanently unfit to work, or if you die before paying it off, so it won't be passed onto your beneficiaries as part of your estate.

  6. Postgraduate loans are paid in the same way as undergraduate loans

    Scottish students can apply for a postgraduate tuition fee loan to cover tuition fees up to £7,000 (2024/25) when enrolled in Masters' and postgraduate diploma programmes. Full-time students are also eligible for a living cost loan of up to £4,500 and from the 2024-25 academic year the amount of loan you are entitled to will include a £2,400 Special Support Loan - meaning a total of £13,900 is available (part-time students will get less).

    The tuition fee loan is paid directly to your university or college, spread equally across the years. If the tuition fee for your course is higher than the maximum loan amount, you will have to make up the difference.

    There are two key requirements:

    1. Your course: This must be your first Master's course. It must be a full-time Master's programme (up to two years in length) or a taught postgraduate diploma programme of up to one year in length.

    2. Your nationality and residency: You must be a UK national (or have settled status), and have been living in Scotland for three years when your course starts. You must be normally living in Scotland (so not have moved there just to study) and aged under 60 on the first day of your first academic year.

    Repayments for Scottish postgraduate loans follow the same system as Scotland's undergraduate loans (Plan 4). If you already have a Scottish undergraduate loan and your earnings go over the current threshold of £31,395, the two debts will be combined and paid via one payment each month.

    For more info see: Student Awards Agency for Scotland

  7. You can take a loan to cover your student living costs, but beware the hidden parental contribution

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    Tuition fees aren't the only expense you have to worry about at uni, you also need to pay for your living costs while you're there – from food and accommodation to textbooks and travel.

    To cover these costs, full-time Scottish students can usually get one or both of the following:

    • Non-repayable bursary. This is worth up to £2,000/year and DOESN'T need to be repaid. How much you'll get depends on family income – the higher yours is, the smaller your bursary entitlement will be.

      So, you'll get the maximum support if your household income is £20,999/year or less, while your entitlement will be quartered by the time your household income reaches between £24,000 - £33,999. Once your income is above that, you won't be entitled to any bursary. But you'll still be entitled to a maintenance loan...

    • Maintenance loan. Scottish students can also take out what's called a maintenance loan to help cover their living costs while at uni. This gets paid into your bank account each term and you pay it back in exactly the same way as your tuition fee loan – it's all seen as part of the same student loan.

      As with the bursary, your loan entitlement is means-tested, so it's based on household income – which, for almost every student under 25, effectively means parental income.

      If your annual household income is under £34,000/year, you'll be entitled to a maintenance loan of £9,400/year. If your income is £34,000 or higher, your loan entitlement falls to £8,400/year.

    Scottish students to receive £2,400 "special support" loan from September 2024. The new loan available to both new and continuing full-time Scottish students is to help with general study, travel and childcare costs. This will be available ON TOP of the existing non-repayable grant and repayable maintenance loan. For full info see the news story.

    So that's how it works in principle, but there are two key things to understand about how it works in practice...

    1. There's a hidden parental contribution

    As explained above, there's a bursary and a loan to help with your student living costs.

    Students from the lowest-income households get the largest amount of support, as they qualify for the maximum possible bursary, and the maximum possible maintenance loan.

    As household income rises, your bursary and loan entitlement decreases, meaning you will get less total support than lower-income households.

    So while it's not made explicit, the Government expects parents to fill this gap themselves. This is the hidden parental contribution. To demonstrate this, let's take a couple of hypothetical examples:

    James is 18 and his parents' income is £19,000, so he'll be entitled to a non-repayable bursary of £2,000 and a repayable maintenance loan of £9,400. James' total support is therefore worth £11,400/year. There's no expected parental contribution.

    John, meanwhile, is also 18. His parents' income is £50,000, meaning he isn't entitled to a non-repayable bursary, and his maintenance loan entitlement will be £8,400/year. As this is less than the total support that students from the lowest-income households will get, the Government expects John's parents to make up the difference. So the hidden parental contribution is £3,000/year.

    The table below shows some more scenarios. Or, for more info and to see exactly how much you're expected to contribute each academic year, use our parental contribution calculator.

    Support towards student living costs in 2024/25

    Household income

    Bursary

    Loan

    Total

    Parental Contribution

    £0 to £20,999

    £2,000

    £9,400

    £11,400

    £0

    £21,000 to £23,999

    £1,125

    £9,400

    £10,525

    £875

    £24,000 to £33,999

    £500

    £9,400

    £9,900

    £1,500

    £34,000 or more

    £0

    £8,400

    £8,400

    £3,000

    2.  If you go elsewhere in the UK to study, you may get less support than your peers

    If you're Scottish and go to England or Wales to study, the maximum maintenance support you'll be entitled to is likely to be LESS than your peers from those countries will get.

    For example, if you wanted to go to, say, Manchester to study, the maximum loan you would be entitled to is £9,000/year. Whereas an English student would get up to £10,227 (assuming they were living away from home), and a Welsh student would get up to £12,150/year. Only Northern Irish students would get less, as their max is £6,776.

    So, you'll be getting less than many of your peers, even though you're living in exactly the same city. This will make budgeting more difficult, and you may need to consider getting a part-time job or asking your parents for (additional) help to cover the shortfall.

    Family income dropped in the last two years?

    Your maintenance loan entitlement is usually based on the tax year that's two years prior to the year you apply. But if you think your family income in for the 2024/25 tax year will be at least 15% lower than it was in the 2023/24 tax year, you may be able to get more maintenance support by applying for something called a current year income (CYI) assessment.

    Quick questions

    • I'm disabled – can I get extra help?

      Extra help, called disabled student allowances (DSAs), is available for disabled students to cover costs you have due to a mental health problem, long-term illness or another disability. You get DSAs on top of your other student finance and you don't need to pay it back.

      How much you get depends on your individual needs and where you're studying – it is not means-tested. See the SAAS website for more details.

    • I care for an adult dependent – can I get extra help?

      The Dependants' Grant available to students who act as carers for their spouse, civil partner, partner or another adult dependant who's not a student. It's income-assessed and your partners income will be taken into account. If eligible, you can get up to £2,640 per year. 

    • I'm a single parent – can I get extra help?

      If you're single, divorced, widowed, separated or your partnership has dissolved, and you're raising children on your own, or you're legally responsible for a younger sibling, you may be eligible for the Lone Parents' Grant. It pays up to £1,305 a year. See SAAS for more info.

    • I am independent from my parents, will I still be assessed based on my parents' income?

      You can apply for independent status, which means your parents' incomes won't be taken into consideration, if you meet one of the following criteria:

      • You're estranged from your parents, meaning you've not had verbal or written contact with them for over a year, and your relationship won't improve in the foreseeable future.
      • You have supported yourself for at least 36 months (three years) before your course starts, although those months don't have to be consecutive. You will need to show proof of your earnings and that you've made enough to support yourself.
      • You've been in local authority care for at least three months after your 16th birthday, you're estranged from your parents and this won't improve.
      • If you don't know where your parents are, or it could be dangerous to contact them, or if your parent has a significant mental health or physical health issue that makes it impractical or dangerous for you to contact them.
      • If you're at least 25 years old on the first day of your course, or you're married or in a civil partnership or have been before but are now separated, or you have a child or dependent, or both of your parents have passed away.

      You will need to provide evidence with your application, so make sure you read the charity Stand Alone's guidance carefully to avoid the risk of being rejected.

  8. Apply for student finance ASAP to make budgeting easier

    For new and returning students, the deadline for the 2024/25 academic year is 30 June 2024. That's the last date at which you're guaranteed to receive your loan in time for the start of term.

    That said, if you do miss either deadline, don't panic. You can still apply for a loan afterwards, but the later you apply, the later you'll receive the money, which may make budgeting difficult.

    See our student budgeting guide for tips on managing your money while at uni.

  9. Your student loan ISN'T like other debts

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    Calling it a student 'loan' is misleading, because it doesn't really work like other types of loans or debt. In fact, it works more like a tax because:

    • It's repaid through the income tax system. If you're employed and earning enough to make repayments, your employer will automatically deduct the repayments from your payslip before you get it. So, no debt collectors will come calling, as you'll have paid it whether you like it or not. (If you're self employed, you'll need to make your repayments through the self-assessment system.)

    • It doesn't go on your credit report. You don't get credit-checked when you apply for a student loan, and the amount you borrow doesn't ever go on your credit report. For more on this, see Student loans and your credit report.

    • It doesn't prevent you from getting a mortgage. As your loan doesn't appear on your credit report, mortgage lenders won't be able to see that you have a loan. So it won't prevent you from getting a mortgage. However, they can still ask if you have a loan, and the fact you're making monthly repayments can affect how big a mortgage you'll be assessed as being able to afford. For more, see Will a student loan affect your ability to get a mortgage.
  10. You can repay early (but it may not be a good idea)

    You can choose to pay off some or all of your student loan, whenever you want. Yet this doesn't mean you should. While we generally encourage people to repay their debts as quickly as possible, student loans are one of the rare cases where that'll be a bad decision for some.

    That's because, under the 'Plan 4' system, you only start repaying your loan when you're earning £27,660/year (£31,395 from April 2024) and whatever you haven't paid back after 30 years is wiped. So if you're unlikely to ever clear your loan in full, overpaying each month is worthless – as the overpayment's not reducing the amount you'd need to pay back at all.

    The only time it might make sense to repay early is if you're certain you will clear the loan before it gets wiped. Even then, it's only worth considering if you've done a number of checks – see our student loans repayment guide for more info.

  11. Ignore headlines about 2023 student loan changes

    The Government recently announced sweeping changes to student loans for new students starting university from September 2023 onwards. But these changes ONLY apply to students from England. So, you won't be affected if you usually live in Scotland – even if you go to an English university.

    But while the system isn’t changing for Scottish students right now, that doesn’t mean there won’t be changes in future. The Government has the power to make new rules, and amend past rules as it sees fit.

    In other words, it's impossible to be certain that your student loan won't end up costing you more than you expected when you started university. But if you want to go to university, unfortunately you have no choice but to accept the terms of your loan as they currently stand.

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