Ah, wouldn’t it be nice if one day your student loan went poof and disappeared? It’s the dream of every student.
Luckily for all UK students, it is actually possible for this to happen. But before you get too excited, know this onlys happen under specific circumstances as laid out by the Student Loans Company (SLC).
How Does The UK Student Loan Repayment System Work?
To understand when and why student loans get written off, it’s important to grasp the fundamentals.
Student loans are provided by the SLC. They cover a student's tuition and living expenses whilst at university and are repaid after graduation.
These repayments only kick in once a student is earning above a set threshold. If you don’t earn above this threshold, your loan won’t be written off, you simply won’t qualify to repay it.
Anyone that does earn above the threshold must make student loan repayments….Or do they?
It’s time to explore the situations where a borrower may be released from repaying a student loan.
When Will My Student Loan Be Written Off?
The most common circumstance for a student loan to be written off is when it expires. In the UK, the outstanding balance of these loans is cancelled once a certain amount of time has passed.
So, though it may sound dull, the easiest way to get a student loan write-off is simple - to wait!
The year your student loan will be written off will depend on which repayment plan you’re on. Every student will be on a specific plan depending on when their course began.
The various repayment plans and when they’re written off are as follows:
- Plan 1 Student Loans - Written off 25 years after the April you were first due to repay. Or, when you turn 65.
- Plan 2 Student Loans - Written off 30 years after the April you were first due to repay.
- Plan 4 Student Loans - Written off 30 years after the April you were first due to repay.
- Plan 5 Student Loans - Written off 40 years after the April you were first due to repay.
Any new graduates will be on Plan 2. This includes any students who took out their loans between September 2012 and July 2023. If this is you, your loan will be written off 30 years after your first repayment was due.
This may (unfortunately) leave you with quite some time to wait until your loan is written off.
And bad luck for any students starting their studies after August 2023. This is about to be hiked up to 40 years!
When Else Is A Student Loan Written Off?
There are some other specific circumstances where a student loan may be written off.
The SLC may write off a person’s student loan if they can no longer work because of illness or disability. If they can provide evidence of certain disability benefits, the loan will be written off.
The SLC will also cancel a person’s student loan if they die. Someone will need to inform the SLC that the person has died and provide evidence, such as a death certification.
So, for anyone thinking they could simply run away and live debt free on a beach somewhere, this won’t work. Failure to repay your loan and the SLC may be forced to take legal action against you.
No student looks forward to repaying their student loan.
However, don’t lose sight of the fact that this loan got you through uni and is likely a big part of where you are today.
Unless it’s written off due to expiring or exceptional circumstances, it must be repaid just like any other kind of debt. Sorry, hopefully we can give you better news next time!
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