What happens if I never pay off my Student Loan?
UK Student Loans act more like a graduate tax than a debt. It does not affect your credit score, bailiffs cannot collect it, and if you don't earn enough, you pay nothing. Crucially, strictly defined dates exist when the entire balance is wiped clean.
1 The Typical Timeline
If you take no action, this is the standard statutory process. Timescales are approximate but typical for 2026.
Interest Accrues
Interest is added from day one, often at high rates (RPI + 3%), but this only matters if you will ever clear the balance.
Repayments Start
You only pay 9% of what you earn ABOVE the threshold (£27,295 for Plan 2). If you earn less, you pay £0.
Write Off
The remaining balance is cancelled. You are free.
2 Free Calculators & Checks
Freedom Date: When exactly will your loan technically expire?
When is my loan wiped?
The "Write-Off" Calculator
Will I pay? Check your salary against the 2024 thresholds.
Will I pay anything?
Monthly Repayment:
You pay NOTHING because you earn under the £27295 threshold.
Get cash back: Did the system overcharge you on a summer job?
Reclaim Overpayments
Did you work inconsistent hours or casual jobs?
Hundreds of thousands of graduates have overpaid because SLC calculates deductions monthly but the threshold is annual.
Example:
You worked loads of overtime in December and earned £3,000 (over the monthly threshold). You paid £50 loan.
But in January and February you earned £1,000. Your TOTAL annual income was roughly £20,000 (under the £27k threshold).
Result: You shouldn't have paid that £50. You can get it back.
The 'Write-Off' Rule
You are not expected to clear the debt. Most people won't. Depending on your plan, the debt is cancelled 25, 30, or 40 years after you graduate. It is not passed to your family.
Don't Overpay!
Unless you are a very high earner who will clear the loan naturally, do not make voluntary extra payments. You are likely throwing money at a debt that would have been written off anyway.
Summary of Options
Reclaim Overpayments
If you worked variable hours/summer jobs, you might have paid when you shouldn't have. Claim a refund from SLC.
Check Your Plan
Make sure your employer has you on the right plan (1, 2, or 5). Being on the wrong one can cost you hundreds.
Common Questions
Does it affect getting a mortgage?
Slightly. Lenders look at your 'affordability' (take-home pay). Since the loan reduces your take-home pay, you might be lent slightly less, but it doesn't count as 'bad debt'.
Can I go to prison for it?
No. It is a civil contract.
What if I move abroad?
You must tell SLC. They have fixed repayment thresholds for every country. If you ignore them, they impose a 'Fixed Monthly Payment' which is high.
Is the interest huge?
Yes, currently very high. But remember: the balance is largely irrelevant unless you are a high earner. The 'Graduate Tax' logic means you just pay 9% for 30 years regardless of whether the debt is £10k or £100k.
Can I cancel it?
Only in rare cases of severe permanent disability preventing work.
Official Sources & References
Related Situations
Other guides accurately explaining what happens next in money & debt .
What happens if I miss a Council Tax payment?
If you miss a payment, the council sends a reminder. If you don't pay within 7 days, you lose the right to pay by instalments and the full year becomes due.
What happens if I can't pay my bills?
Not all debts are equal. Some 'Priority Debts' can make you homeless or lead to prison, while others just affect your credit rating. If you are in calm, you must pay the Priority Debts first.
What happens to debt when you die?
A guide to 'Insolvent Estates', inherited debt myths, and the Order of Payment.