Plan 5 Student Loan Write-Off: The 40-Year Timeline Explained (2026/27)

What "write-off" actually means

At the end of the repayment term, whatever balance remains on a Plan 5 student loan — original borrowing plus all accrued interest, minus whatever has been repaid — is cancelled in full by the Student Loans Company. The borrower owes nothing further, and the cancellation does not appear as taxable income, a debt write-off charge, or anything requiring a Self Assessment entry.

This is fundamentally different from most consumer debt. There is no negotiation, no partial settlement figure, and no credit-file consequence. The loan simply ceases to exist on the specified date.

When exactly does the clock start?

The 40-year period begins from 6 April in the year you become liable to start repaying — which is usually the April immediately after you complete or leave your course, once you are earning above the threshold (or, for the clock itself, regardless of whether you are earning above threshold in that specific year; the term runs from the qualifying April regardless of subsequent income).

For example, a student finishing their course in June 2027 would typically become liable to repay from April 2028, meaning the loan would be written off in April 2068 — assuming the balance has not already been fully repaid earlier.

Why Plan 5 is longer than Plan 2

Plan 2 loans (for English and Welsh students starting between 2012 and 2023) are written off after 30 years. When the government introduced Plan 5 for new entrants from September 2023, it simultaneously:

• Lowered the repayment threshold from £29,385-equivalent levels down to a fixed £25,000 (uprated only occasionally rather than annually with earnings), meaning more graduates cross into repayment sooner and at a lower income; and
• Extended the write-off term from 30 to 40 years.

Combined, these two changes mean more total repayment is extracted over a graduate's working life, even though the headline interest rate (RPI only, with no extra percentage) is lower than the top end of Plan 2's rate.

Worked example: a graduate who never clears the balance

Suppose a Plan 5 graduate borrows a total of £45,000 (tuition fees plus maintenance loan) across a three-year degree, and their income progresses from £26,000 in their first working year to £45,000 by their mid-career, staying in that range for the rest of their working life.

• Annual repayment at £45,000 income: 9% × (£45,000 − £25,000) = £1,800 a year
• Over a 40-year career, at a flat £1,800 a year (ignoring inflation-linked wage growth and threshold freezes), total nominal repayments would be £72,000

Despite this substantial lifetime repayment total, RPI-linked interest compounding on the outstanding balance for decades means many such graduates are still projected to owe money at the point of write-off — because interest accrual on a large balance for a long period can outpace repayments made only on the portion of income above the threshold.

Should you try to repay faster to avoid interest?

For most graduates the answer is no, for the same reason discussed for the tuition fee loan: if you are not on track to clear the balance before year 40 regardless of extra payments, voluntary overpayments simply hand money to the SLC that would otherwise have been written off. The exception is graduates with high and rising income from early in their career, who may be on a realistic trajectory to repay in full — for this group, understanding whether extra payments reduce total interest paid (rather than simply being wasted against a balance that would be cancelled anyway) is worth modelling carefully before committing.