when do student loans get written off uk
When do student loans get written off?
When you read about the debt that students build up today, it is eye-watering: £30K, £40K, even £50K! As a fresh graduate heading out into the world of employment, it’s a huge weight on your shoulders. If this is you, and you’re trying to find out whether there's a way for this student debt to be written off magically. There's good news, but it doesn't come easily.
No magic wand will quickly write off your student loan debt. The circumstances would have to be specific for this to happen. The Student Loan Company will always try to recover all the money loaned.
However, there are circumstances under which your student loan could be written off, so let’s examine the different repayment plans and potential scenarios.
Which plan does your Student Loan debt fall into?
Student loans fit into one of five repayment plans: Plan 1, Plan 2, Plan 4, Plan 5 and Postgraduate Loan. If you don’t know which repayment plan your debt fits into, you can find out here and then come straight back!
Now that you know which plan your student loan debt falls into let’s look at what this means when it comes to writing off your student loan debt.
Student Loan Plan 1
If your student loan falls into Plan 1, the date your debt will be written off depends on when you received your first loan for the course:
- If you received your first loan before 1 September 2006, your loans will be written off when you reach 65.
- If you received the first loan on or after 1 September 2006, your loans will be written off 25 years after the April you were first due to start your repayments.
Student Loan Plan 2
If your student loan falls into Plan 2, you can expect your student loan to be written off 30 years after the April you were first due to start your repayments.
Student Loan Plan 4
Similar to Plan 1, if your student loan falls into Plan 4, the date your debt will be written off depends on when you received your first loan for the course:
- If you received your first loan before 1 August 2007, your loans will be written off when you turn 65 or 30 years after the April you were first due to start your repayments, whichever comes first.
- If you received your first loan on or after 1 August 2007, your loans will be written off 30 years after the April you were due to start your repayments.
You’ll notice a bit of a theme, and it’s pretty safe to assume you will be at least 50 years old before your loan is written off!
Student Loan Plan 5
If your student loan falls into Plan 5, you can expect your student loan to be written off 40 years after the April you were first due to start your repayments.
Postgraduate Loan
If you continue your education to postgraduate, here’s a breakdown of when your Student Loan Debt will be written off, and it varies a little depending on where you are from:
- If you're an English or Welsh student, your Postgraduate Loan will be written off 30 years after the April you were first due to start your repayments.
- If you're Northern Irish, see Student Loan Plan 1
- If you're Scottish, see Student Loan Plan 4
Again, the rules are very similar, and you won’t shake off your debt without a long wait. However, there are other less common circumstances to be aware of that will also affect when your student loan debt is written off.
Under what circumstances could my Student Loan be written off?
Well, there are two other significant circumstances whereby your loan may be written off, these are:
- If you can no longer work due to an illness or disability (you should be claiming benefits associated with this).
- If you.... and there's no nice way to say this.... but if you die. The Student Loan Company will cancel your loan. They will need to see an original death certificate to prove this.
Remember to read The Real Debt Guy's final thoughts below!
The Real Debt Guy is a qualified financial adviser and a UK debt expert. The information in this article is considered to be true and correct at the publication date.
