Medics Money podcast Ep 301: How student loans are punishing new doctors??
Dec 9, 2025
Explore the complexities of UK student loans as experts break down the differences between Plan 2 and the newly introduced Plan 5. Learn how these plans affect repayments, interest rates, and the financial future of new doctors. Discover whether student loans resemble a graduate tax rather than a standard loan. The discussion delves into the real costs of education, the burden on students, and the vital need for evaluating loan necessity. Finally, they tackle the value of degrees and the implications of recent university strikes on student finances.
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Plan 2 Is Essentially A Graduate Tax
- Plan 2 functions effectively as a graduate tax with repayments at 9% above £27,295 and interest up to RPI+3%.
- Repayments stop after 30 years and only ~23% fully repay, so most owe-forgive dynamics resemble a tax.
Plan 5 Is More Punitive Than Plan 2
- Plan 5 lowers the repayment threshold to £25,000, charges interest at RPI, and extends write-off to 40 years.
- The changes make the new plan more punitive and increase the share expected to fully repay to about 50%.
Plan Your Budget For April Repayment Start
- Expect repayments to start the April after you graduate if your income exceeds the threshold.
- Factor this timing into early-career budgeting and cashflow plans.