When is a student loan written off? Almost 1.8m people in the UK owe £50,000 or more

Almost 1.8 million people in the UK reportedly owe at least £50,000 in student debt.

According to data obtained by the BBC from the Student Loans Company (SLC), more than 61,000 borrowers owe over £100,000. Fifty more each owe more than £200,000.

The BBC obtained these statistics following a Freedom of Information (FOI) request for the number of loan holders with "above average debts" qualified to begin repayments.

According to recent Government data, the average sum at which borrowers begin making loan payments was £48,470 — the previous average was less than £45,000. The BBC said 2.8 million people in England repaid their school loans in 2023–2024.

The highest student loan debt was more than £230,000 in March 2024, previous BBC News research into graduation costs has shown.

The National Union of Students (NUS) fears the spiralling costs will put poorer people off university.

Chloe Field, the union’s vice president, said: “These figures are an indictment of our education system. The UK cannot pretend that university is accessible to everyone when there is the possibility of students incurring over £200,000 worth of debt.

“Student debt discourages people from working-class backgrounds from going to university, no matter how much they may thrive there or how much they want to go.

“Education is a human right, it should be equally available to everyone throughout their lives, including for people who want to retrain later in life.”

In the UK, the conditions under which a student loan is written off (or forgiven) depend on your repayment plan.

Here’s all you need to know about the different plans for student loan repayment.

The different plans for student loan repayment

UK student loan repayment plans depend on when you started your course, where you live after completing your studies, and how much you earn.

The various plans are as follows:

Plan 1

This plan applies if you are from England, Wales, or Northern Ireland and started your studies before September 2012, or if you're from Scotland and started before April 2013.

As per the Government website here, when your Plan 1 loan gets written off depends on when you were paid the first loan for your course.

If you were paid the first loan on or after September  1, 2006, the loans for your course will be written off 25 years after the April you were first due to repay.

If you were paid the first loan before September 1, 2006, the loans for your course will be written off when you’re 65.

You typically repay 9 per cent of your income over £480 a week, £2,082 a month, or £24,990 per year (as of April 2024). There's a threshold system, so if you earn less than this amount, you won't make any repayments that year.

Plan 2

This applies if you are from England or Wales and started your studies on or after September 2012, or from Scotland and started on or after April 2013.

Here, you repay 9 per cent of your income over £524 a week, £2,274 a month, or £27,295 a year(as of April 2024). Similar to Plan 1, there's a threshold, and repayments apply only if your income exceeds it.

You will be on Plan 2 if: you’re studying an undergraduate course’ you’re studying a Postgraduate Certificate of Education (PGCE); you take out an advanced learner loan; or you take out a higher education short course loan.

Plan 2 loans are written off 30 years after the April you were first due to repay.

Plan 4

You’re on Plan 4 if you applied to the Students Award Agency Scotland, whether you studied an undergraduate course or a postgraduate course.

If you were paid the first loan on or after August 1, 2007, the loans for your course will be written off 30 years after the April you were first due to repay.

You repay 9 per cent of your income over £603 a week, £2,616 a month, or £31,395 a year (as of April 2024). Similar to the other plans, there's a threshold, so you won't make repayments if you earn less than this amount.

When your Plan 4 loan gets written off depends on when you were paid the first loan for your course.

If you were paid the first loan before August 1, 2007, the loans for your course will be written off when you’re 65, or 30 years after the April you were first due to repay — whichever comes first.

Plan 5

Plan 5 is a new student loan repayment plan introduced in the UK for students starting undergraduate and Advanced Learner Loan courses on or after August 1, 2023.

Repayments for Plan 5 won't begin until April 2026 at the earliest. This applies even if you leave your course early.

You'll start repaying only if your income is over the repayment threshold. The 2026-27 tax year threshold is set at £25,000 a year, which is £2,083 a month or £480 a week.

Like other plans, repayments are a percentage (9 per cent) of your income exceeding the threshold.

If your income falls below the threshold again, your repayments will stop and only restart when your income rises above it again.

The loan is automatically written off after 40 years (or if you die) even if the full amount isn't repaid.

Postgraduate Loan Plan

The Postgraduate Loan Plan applies specifically to students pursuing postgraduate master's courses.

It is available to students from England, Wales, Scotland, and Northern Ireland studying a master's course, including MA, MSc, MBA, LLM, MRes, and similar courses.

You must normally live in England, Wales, Scotland, or Northern Ireland (depending on where you apply) on the first day of the first academic year of your course.

You’ll repay only when your income is over £403 a week, £1,750 a month, or £21,000 a year.

Like other plans, repayments are a percentage (9 per cent) of your income exceeding the threshold.

If your loan was taken out with Student Finance Northern Ireland, your plan type is repayment plan 1.

If you're a Scottish student who started an undergraduate or postgraduate course anywhere in the UK on or after September 1, 1998, you'll be on repayment Plan 4.

Like other student loan plans in the UK, any remaining balance on your Postgraduate Loan will be written off 30 years after the April you were first due to repay, regardless of how much you have repaid.

What happens to a student loan if someone can no longer work or dies?

The UK rules regarding student loans in the unfortunate events of permanent disability, incapacity to work, or death are as follows:

Permanent disability or incapacity to work:

• If you become permanently unfit for work due to illness or disability and meet certain criteria, your student loan may be eligible for cancellation (also known as "write-off"). The conditions for cancellation due to disability vary but typically require medical evidence and assessment.

• Generally, the cancellation process considers whether your disability prevents you from engaging in any form of gainful employment for the rest of your life.

• The cancellation process is initiated through an application with evidence from medical professionals.

Death:

• If the borrower (student) dies, any outstanding student loan debt is typically written off.

• There are no repayment obligations for the borrower’s estate or family members.

• The loan is considered cancelled upon confirmation of the borrower's death, and the estate is not required to make any further payments.

It's important to note that the procedures and policies for cancellation due to disability or death can vary slightly depending on the specific loan plan (Plan 1, Plan 2, Postgraduate Loan, etc.) and the country within the UK (England, Wales, Scotland, Northern Ireland).

Generally, the Student Loans Company (SLC) or the relevant Student Finance body should be contacted directly to initiate the cancellation process and provide necessary documentation.

For more information on what to do if a customer dies, visit the Government website here.

If a customer is permanently unfit to work, the Government website has more details.