Do Student Loans Get Forgiven In The UK?

Ah, wouldn’t it be nice to live in a world where all debt gets forgiven? This is particularly true in the case of student loans, which can be infamously high.

In fact, most new UK students will be graduating from university with around £45,000 in debt. Just a glance at this eye-watering sum will leave anyone wondering - could this ever be written off?

How Does The UK Student Loan System Work?

To comprehend student loan forgiveness, we need to grasp the basics of the student loan system.

In the UK, student loans exist to cover tuition and living expenses during university. All of those buses to uni, books for your coursework, and drinks down the pub? Covered by your loan.

Unfortunately, this isn’t free money. The Student Loans Company (SLC) will want this cash back plus interest once you’ve graduated. These repayments will start to be taken every month once you’re earning above a set threshold.

Unfortunately, a student loan is just like any other loan, it must always be repaid. Or does it?

In fact, there are a few instances where a borrower may be released from repaying their student loan.

Is There A Difference Between Student Loan Forgiveness vs Write-Off?

It is possible. But don’t get too excited! There are only two instances where this will occur: when the loan is written off, and when it is forgiven.

A student loan can be cancelled if certain conditions are met, or after a specific time period. When it is cancelled, the remaining balance is written off.

In the case of UK student loans, this will all depend on which repayment plan you’re on. Each plan specifies an age and amount of years after which the loan will be written off. For example, Plan 2 loans (for any new grads, this will be you) are written off 30 years after they were first due to be repaid.

So, hurray! It’s a little boring, but if you simply wait long enough your loan will be written off. This is, of course, unless you have already repaid it in full before its term ends.

In very special cases, a student loan may also be written off due to a borrower’s financial hardship. However, these cases are evaluated on an individual basis and not everyone will qualify.

Student loan forgiveness is a little different and a much rarer occurrence.

Can Student Loans Be Forgiven In The UK?

Many grads with large outstanding debts would no doubt be relieved to see their debt forgiven. Just think, one less thing that you have to repay! Alas, the UK has no comprehensive student loan forgiveness programme in place.

However lovely it would be, it would simply not be compatible with the SLC. It would be too tricky to grant students up and down the UK forgiveness due to individual circumstances.

Instead, the SLC will only forgive student loan debt for a handful of reasons. If the debt has been written off, if the borrower dies, or if the borrower becomes unable to work due to a permanent disability.

So, for anyone thinking they can simply run away from their student debt, sadly, it won’t work. Bummer.

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

So, student loan forgiveness is not something widely practised in the UK. It is only in specific scenarios that this would happen.

Failure to repay could force the SLC to take legal action against you. This could mean a court order to make you repay the debt plus interest and penalties. Best avoid this at all costs if you can!

This means that, for any grads out there, your debt is not going to disappear any time soon. However, it’s important to remember that your repayments only increase as your salary goes up, so they should (in theory) always be manageable.

Conclusion

Though it may not be what grads want to hear, in the UK, there is no comprehensive forgiveness programme. Student loans can be cancelled, but only as a result of a borrower’s age, financial circumstances, disability, or death.

Generally speaking, a student loan must be repaid just like any other kind of debt. Sorry we didn’t have better news for you this time!

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