UK Plan 2 Student Loan Model

By Mitchell Palmer (Adam Smith Institute)

This model allows users to simulate the effects of different changes to student loan parameters on a hypothetical existing Plan 2 borrower. It assumes that the borrowers' lifetime income follows the standard trajectory.

This is not financial advice and should not be used as such. The model is based on a number of assumptions and simplifications, and is not intended to be a precise predictor of individual outcomes. Last updated: 20 February 2026.

Summary Outputs

Face Value in 2025: {{ formatCurrency(summary.faceValue2025) }}

{{ item.label }}

Status Quo: {{ formatCardValue(item, item.statusQuo) }}

Changed: {{ formatCardValue(item, item.changed) }}

Δ: {{ formatCardDelta(item) }}


Valuations

Method Discount Rate NPV SQ NPV Changed NPV Δ % Face SQ % Face Changed % Face Δ RAB SQ RAB Changed RAB Δ
{{ row.method }} {{ row.discountRate }} {{ formatCurrency(row.npvStatusQuo) }} {{ formatCurrency(row.npvChanged) }} {{ formatCurrency(row.npvDelta) }} {{ formatPct(row.pctFaceStatusQuo) }} {{ formatPct(row.pctFaceChanged) }} {{ formatPct(row.pctFaceDelta) }} {{ row.rabChargeStatusQuo === null ? '—' : formatPct(row.rabChargeStatusQuo) }} {{ row.rabChargeChanged === null ? '—' : formatPct(row.rabChargeChanged) }} {{ row.rabChargeDelta === null ? '—' : formatPct(row.rabChargeDelta) }}

Balance, Flows & Income

Loan Balance by Tax Year Ending

Changed Status quo

Annual Flows: Changed Scenario

Borrowing Interest Repayment Net change

Annual Flows: Status Quo Scenario

Borrowing Interest Repayment Net change

Income with Repayment Share: Changed Scenario

Income after repayment Income Lower threshold Upper threshold Repayment share

Income with Repayment Share: Status Quo Scenario

Income after repayment Income Lower threshold Upper threshold Repayment share

Yearly Model Table

Year Stage Age Income {{ group.label }}
{{ row.year }} {{ row.lifeStage }} {{ row.age }} {{ formatCurrency(row.incomeChanged) }}