The average university fee is currently over £9,000 a year and millions of students take out loans to help cover the cost.
A finance expert has revealed exactly how long you have left before your student loan is “wiped”. You may not realise that after a number of years your Student Finance debt is automatically cleared, regardless of how much you’ve paid back.
In decades past, university had been free for all UK students. However, as of 1998 people from England, Wales, and Northern Ireland were charged to study.
As a result, millions of people had to use Student Finance to cover the cost of fees. Loans were also made available to help with living costs.
These loans only need to be repaid once you are earning a certain amount of money in your job, so some people may never pay a single penny back. However, there are certain circumstances in which your debt can be wiped.
In a video uploaded to social media platform Instagram, Martin Lewis explained the criteria in which your loan could be scrapped. He said: “If you are one of millions of people currently having to repay your student loan the big question I get from many is when does it wipe?”
However, he said: “The actual answer is a little bit complicated. It depends from where in the UK you’re from and when you started at university.
“So I will run through all those different iterations for you. But before we get into that, I think it’s worth remembering there are four different reasons that you will stop repaying the student loan.”
These are:
- If you’ve paid back your loan plus all the interest
- If you’ve hit the time limit
- If you die
- If you get a permanent disability or illness that were to stop you from ever working again
“The first and the most obvious is you’ve cleared what you borrowed plus the interest – there’s no longer anything left to repay you stop repaying,” Martin said. “The second is you’ve hit the time limit and all different variants of student loans have a time limit.
“It could be 30 years, 40 years, age 65, that depends. And I’m going to run through the detail on that.
“The third, and it’s a common question, is if you were to die. If you die your student loan does not form part of your estate, the people who inherit from you will not have to pay it off, it’s simply wiped, it never needs paying.
“And the final one, which is somewhat similar, is if you were to get a permanent disability or illness that were to stop you from ever working again, you may be able to apply to have your student loan wiped at that point.”
How long until your loan is wiped
Returning to his second point, Martin explained that your loan can be wiped if a specific number of years have passed. But this will depend on where you live and when you got your loan.
He said: “So for current English students and all those who started since September 2023, your loan will wipe 40 years after the April after you left university.” Martin then stated that English students who started between 2012 and 2022 will see their loan wiped after 30 years.
The same is true for Scottish students who started from 2007. He continued: “For Northern Irish students who started 2012 or afterwards up until including today, your loan will wipe after 25 years.”
But if you started between 1998 and 2005 in England, Wales or Northern Ireland, your loan wipes when you hit age 65. “If you started between 1998 and 2006, in Scotland, your loan wipes the earlier of 30 years after the April after you left university or when you hit 65,” he said.
“If you started between 2006 and 2011 in England, Wales and Northern Ireland it’s 25 years after the April after you left university.” He added: “Now, there are some older loans than that but most people who have them are no longer eligible to repay them.”
For more information, he directed his followers to his Money Saving Expert website, here. You can also check how much you have left on your loan to pay on the Government website, here.