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There isn’t really any other financial product in the UK where if you haven’t repaid it in full, it will just get written off at a certain point. And that is the beauty of a student loan.
However, when it gets written off depends on when you took out your loan. So let’s take a look.
When does my loan get written off?
When your student loan gets written off is dependent on the academic year you took out your loan, not which loan plan you are on. However, as which loan plan you are on is often dictated by when you started your course, it doesn’t make much of a difference.
If you don’t know what I mean by loan plan, then let me explain. There is a Plan 1 student loan and a Plan 2 student loan. Which you have depends on when you started your course and your nationality:
- If you are an English or Welsh student who started an undergraduate course anywhere in the UK before 1 September 2012, or you are a Scottish or Northern Irish student who started your course on or after 1 September 1998, then you will be on Plan 1.
- If your course started after 1 September 2012 and you are English or Welsh, then you will be on Plan 2.
Within Plan 1 there are several configurations that influence when your loan will be written off. Let’s break it down:
|Academic year your course started||Your nationality||When your loan is written off|
|2005 to 2006, or earlier||English, Welsh, Northern Irish||When you are 65|
|2006 to 2007, or later||English, Welsh, Northern Irish||25 years after the April you were first due to repay|
|2006 to 2007, or earlier||Scottish||When you are 65, or 30 years after the April you were first due to repay (whichever comes first)|
|2007 to 2008, or later||Scottish||30 years after the April you were first due to repay|
If you are on Plan 2, it is slightly simpler. Your loan will be written off 30 years after the April you were first due to repay.
Are there other circumstances when my loan will be written off?
With all student loans in the UK, the loan will be written off in the case of death. Evidence of the death (for example an original death certificate) will need to be provided to the Student Loans Company (SLC) as well as the person’s Customer Reference Number.
Similarly, if you can no longer work because of illness or disability, you could also have your loan written off. This depends on whether you claim certain disability benefits. You will need to provide evidence to the SLC, alongside your Customer Reference Number.
Is my loan written off if I stop working or my income drops?
If you have already begun to pay back your loan and you stop working for a period of time or your income drops below the repayment threshold, then your student loan repayments will automatically stop. But your loan will not be written off.
If, in the future, you go back into employment or resume earning above the salary threshold, your repayments will begin again. This isn’t something to be concerned about, as although your loan will have had interest added to it, your payments will continue as before until it is paid off or written off. And, as your student loan is not included in your credit report, there is little impact in your loan continuing until you reach the point that it is written off.
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