One of the things students often worry out is when does your student loan get written off? Finance and the cost of living is a big one for students (or potential students deciding on whether or not to go to uni), so it makes sense to think ahead about paying back your student loan. That’s why we’ve put together all the information about when student loan is written off, breaking it down by different student loan plans to help you out.
When does student loan get written off?
Understanding when a student loan gets written off is a crucial aspect for students in the UK navigating their financial future. The write-off period for a student loan in the UK largely depends on the type of loan you have and when you took it out. For Plan 1 loans, the debt is written off 25 years after you become eligible to repay or when you turn 65, whichever comes first. In contrast, Plan 2 loans are written off 30 years after you become eligible to repay. Scottish and Northern Irish students, who are generally on Plan 1, also have different terms, with the loan being written off when they turn 65.
It’s important to note that the eligibility to repay usually begins in the April after you leave your course, or when your income reaches a certain threshold, whichever comes first. These thresholds vary and are subject to change, so staying informed is key. Additionally, if you have a Postgraduate Loan, the write-off terms differ again, typically 30 years after the April you were first due to repay. Understanding these nuances is essential for UK students to effectively manage their student loans and plan their finances accordingly. Keeping abreast of any changes to these terms by the UK government or relevant student finance bodies is also crucial for ongoing financial planning.
When does student loan get written off?
| Start Year | When your student loan is written off |
|---|---|
| 1990-97 (if you’re under 40 years old during final year of study) | Age 50 or 25 years from your first payment from your final year loan agreement |
| 1990-97 (if you’re over 40 years old during final year of study) | Age 60 |
| 1998-2005 (UK except Scotland) | Age 65 |
| 1998-2006 (Scotland) | Age 65 or 30 years after the April following your final year of university |
| 2006-11 (UK except Scotland) | 25 years after the April following your final year of university |
| 2007 - present (Scotland) | 30 years after the April following your final year of university |
| 2012 - 22 (England) | 30 years after the April following your final year of university |
| 2012 - present (Northern Ireland) | 25 years after the April following your final year of university |
| 2012 - present (Wales) | 30 years after the April following your final year of university |
| 2023 - present (England) | 40 years after the April following your final year of university |
If you’re not sure which repayment plan you’re on, don’t worry, we’ve got you covered there too.
When do Plan 1 loans get written off
If you started your course before 1st September 2012, you’ll be on plan 1. But that doesn’t necessarily determine the exact time your student loan will be written off.
According to Gov.uk, if they paid you the first loan on or after 1st September 2006, they will write off your student loans 25 years after the April you first became due to repay.
If they paid you the first student loan before 1st September 2006, they will write off your student loan when you turn 65.
When do Plan 2 loans get written off
According to Gov.uk, if you started your course between the 1st September 2012 and 31st July 2023, you’ll be on plan 2 when it comes to student loan repayments.
Plan 2 loans are written off 30 years after the April you were first due to repay.
What about Plan 4 and postgraduate loans?
You’ll be on Plan 4 if you applied to Student Awards Agency Scotland, whether for an undergraduate course or a postgrad.
Again, according to Gov.uk, they will write off your plan 4 student loans 30 years after the April you first became due to repay your student loan. If they paid you the first loan before 1st August 2007, they will write off your student loan either when you turn 65 or 30 years after the April you first became due to repay – whichever comes first.
If you’re on Plan 5?
You’ll be on plan 5 if you start your course on or after the 1st of August 2023, whether an undergraduate course, PGCE or if you take out an Advanced Learner Loan.
As stated on the Gov.uk site, plan 5 loans are written off 40 years after the April you were first due to repay.
When do you start student loan repayments?
Once you graduate, it’s totally normal to instantly miss your uni days. You know, rolling out of bed late, nights out (and fun nights in), societies, dating, the lot. Now it feels like you’ve been sent out into the big bad world, in need of a graduate job and work experience… With a student loan to pay back… At some point.
But when do you start paying your student loans back? Well, you don’t need to worry about that just yet. You’ll only start repaying your student loan when you hit the repayment threshold.
It’s important to keep an eye on the student loan repayment threshold, as this threshold changes on the 6th of April each year. According to the Gov.uk site:
The earliest you’ll start repaying is:
- the April after you leave your course
- the April 4 years after the course started if you’re studying part-time or doing a Postgraduate Doctoral course and your course is longer than 4 years
- April 2026 if you’re on Plan 5
Your repayments automatically stop if either:
- you stop working
- your income goes below the threshold
Loan repayment plan for plan 1 student loans
As stated on the Gov.uk website, here are the current repayment thresholds for student loans:
For plan 1, you’ll only repay when your income is over £423 a week, £1,834 a month or £22,015 a year.
Repaying student loan on plan 2
You’ll only repay your student loans when your income is over £524 a week, £2,274 a month or £27,295 a year.
Paying back plan 4 student loans
You’ll only repay your loan when your income is over £532 a week, £2,305 a month or £27,660 a year.
Plan 5 repayment threshold
You’ll only repay your student loans when:
- Your income is over £480 a week
- £2,083 a month or £25,000 a year
Repaying an overpayment
If the Student Loans Company (SLC) has paid you more student loan or grant than you’re entitled to, they will write to you to request repayment of this amount – separate from your student loan.
Can you pay off student loans early?
One common question among students and graduates is whether they can pay off their student loans early. This might be partially or fully. The straightforward answer is yes, you can pay off your student loans ahead of schedule in the UK, and there are no penalties for doing so. This option can be particularly appealing for those looking to reduce the amount of interest accrued over time or to free themselves from debt sooner.
When considering early repayment, it’s important to evaluate your financial situation carefully. Here are some key points to consider:
- No Early Repayment Penalties: Unlike some other forms of debt, UK student loans do not incur penalties for early repayment. This flexibility allows borrowers to make additional payments whenever they are financially able to.
- Interest Rates: Student loan interest rates in the UK can vary based on your circumstances and the type of loan. Understanding how interest is calculated on your loan can help you determine the potential savings from early repayment.
- Budgeting and Financial Priorities: Assess your overall financial health. If you have other debts with higher interest rates, it might be more beneficial to pay those off first. Additionally, consider building an emergency fund and contributing to savings or investments that might offer higher returns.
- Automatic Repayment Thresholds: Remember that student loan repayments are typically taken automatically through the UK tax system once your income reaches a certain threshold. Paying off your loan early means you’ll stop these automatic deductions sooner, potentially increasing your take-home pay.
- Long-Term Financial Impact: Weigh the long-term effects of paying off your student loan against other financial goals, like saving for a house or retirement. Since student loans are written off after a certain period, it’s worth considering whether early repayment is the best use of your funds.
- How to Make Extra Payments: If you decide to pay off your loan early, you can make extra payments at any time directly to the Student Loans Company (SLC). It’s straightforward to do this online or by other payment methods offered by the SLC.
We know that student loans and student debt can cause a lot of concern. It isn’t a small amount of money and it can take a long time to be written off. However, you don’t normally have to pay off student loans until you’re earning over a specific threshold, which usually makes it more manageable. And if not, student loans do get written off at some point!
For more information about student loans, check out our ultimate guide to student finance.
Last Updated on September 13, 2024
Published on October 12, 2023
