Finance · 5 min read

What Happens If You Don't Pay Off Student Loans in the UK?

What Happens If You Don't Pay Off Student Loans in the UK?

Repaying your student loan is something no one looks forward to doing. It can be exciting to start earning an income, finally, you have money to buy what you want, to move into a place of your own! The thought of using it for debt repayment may feel like a thump back down to earth.

Unfortunately, just like any other debt, student loans must be repaid. So, to anyone thinking they can sneakily avoid this, it’s time to explore the repercussions student debt evasion can cause.

How Does Student Loan Repayment Work In The UK?

Student loans are an integral part of UK higher education. They are what allow so many students to go to university without feeling a huge financial burden.

These loans are granted by the Student Loan Company (SLC). The SLC will give students the money they need to cover tuition and living fees. But, sooner or later, they’re going to want this money back, plus interest.

All those drunken kebabs and overpriced cocktails? It may have seemed like a good idea at the time, but students tend to rack up a lot of debt. Today, a new grad is expected to have around £45,000 in student loan debt.

This whopping sum will need to be repaid once you start to earn over a set threshold. The idea is that the amount you re-pay increases with your pay, making it more affordable relative to your income. But what happens if you decide not to do this?

What Happens If You Don’t Repay A Student Loan?

Especially in today’s digital age, debt follows you throughout your life. There are only a handful of reasons why a student may be excused from repaying their debt in full. This will be because the debt is either written off or, in very rare cases, forgiven.

If you’re not eligible to have your debt cancelled, you will need to repay it. Failure to do so will provoke steps to be taken by the SLC. This will become increasingly serious for anyone who consistently fails to make the loan repayments. Some repercussions could include:

Late Payment Penalties

The first thing a graduate may face in falling behind on payments is penalty charges. These may include interest charges or fines.

The last thing anyone will want when repaying debt is to add to the pile. So, best avoid these if you can!

Increased Interest

Failure to repay your loan will mean the outstanding balance you owe will increase in interest.

In short, the longer you take to repay a loan, the more interest it will gather. If you keep avoiding your loan repayments, these interest charges can accumulate pretty fast.

Final Measures

If you consistently fail to make repayments, the SLC will be forced to take legal action against you.

This may involve a court order to make you repay the total debt in full. This will need to be done in a single payment and will include interest and penalty fees. Yikes! This could be a huge amount of money so should definitely be avoided at all costs.

What Are The Impacts Of Not Repaying A Student Loan?

The steps the SLC will take to chase you if you fail to repay your loan are scary enough. But unfortunately, that’s not even the end of it. Your financial reputation with other lenders will also be at risk as your creditworthiness may also be damaged.

Although student debt doesn’t explicitly appear on your credit report, your reputation may still be affected. A lender may inquire about your student debt when they’re assessing you. Any lack of repayments will be a huge red flag and may deter them from wanting to lend to you.

This could impact your financial future and make it far more challenging to obtain any more loans.

If you’re having trouble wrestling with your loan repayments, there are ways to help. Try signing up for online tools that can offer ways to boost your finances. This will be a big help in making sure you can afford your next monthly loan bill!


Paying off any kind of debt is an important habit to get into. Repaying your student loan is no exception. Failure to do so could lead to some pretty nasty long-term repercussions. Not only could you face added fees and legal action, but you struggle to borrow money again in the future.

It’s for these reasons that it is so important to try and stay on top of your loan repayments. If you are struggling, just be honest with the SLC. They may discuss alternative repayment options with you to help keep you financially afloat.

Want to improve your financial literacy and work towards your savings goals? Get started with Prograd today.

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