Plan 2 Student Loan Write-Off: When Is It Written Off?
Plan 2 student loans are written off 30 years after you enter repayment. For most borrowers who started university between September 2012 and July 2023, this means the loan will be cancelled between 2043 and 2054. The remaining balance is written off automatically — no application needed, no tax to pay.
The 30-year write-off rule
Your Plan 2 loan enters repayment from the April after you graduate or leave your course. The 30-year clock starts from that April. Any remaining balance — regardless of how large — is cancelled at the end of the 30-year period.
For example: if you graduated in July 2015, your loan entered repayment in April 2016. The balance will be written off in April 2046.
Will you repay in full or have it written off?
This depends on three factors: your starting balance, your lifetime earnings trajectory, and the interest rate on your loan. Plan 2 interest is linked to RPI (currently around 7.5%), which means balances grow significantly for graduates who are not yet earning above the threshold.
The Institute for Fiscal Studies estimates that the majority of Plan 2 borrowers will not repay in full. Typical scenarios:
Likely to repay in full
Graduates earning £45,000+ early in their career with sustained above-average salary growth. Typically those in finance, technology, law, or medicine.
Borderline — worth checking
Graduates earning £30,000–£45,000 with moderate growth. The outcome depends heavily on career progression and interest rates over 30 years.
Likely to be written off
Graduates with starting salaries under £30,000 and balances above £40,000. The interest accruing often exceeds repayments in the early years.
Use our loan projection calculator to model your specific situation with your actual balance and income.
Should you make voluntary repayments?
This is the most misunderstood aspect of student loans. Voluntary repayments only save you money if you are on track to repay the full balance before write-off. If your loan will be written off regardless, voluntary repayments simply reduce the amount written off — money you would never have had to pay.
If the projection shows write-off: Do not make voluntary repayments. That money is better used for pension contributions (which attract tax relief), mortgage overpayments, or other savings.
If the projection shows full repayment: Voluntary repayments can reduce total interest paid. Compare the effective interest rate on your loan against the returns from alternative uses of that money.
Interest on Plan 2 loans
Plan 2 interest is RPI plus a margin of 0% to 3% based on your income. While studying, interest is RPI + 3%. After graduation, the margin reduces on a sliding scale — at the repayment threshold it is RPI + 0%, rising to RPI + 3% for incomes above £49,130.
Crucially, interest affects your balance but not your monthly repayment. Your monthly deduction is always 9% of income above the threshold, regardless of your balance or the interest rate. High interest can mean your balance grows even while you are making repayments — but this does not increase what you pay each month.
What about inflation?
Because the balance is written off in nominal terms, inflation works in your favour. A £50,000 balance written off in 30 years is worth considerably less in real terms than £50,000 today. This is another reason why voluntary repayments are often not worthwhile — you are effectively repaying a debt that is being eroded by inflation and will be cancelled regardless.
Plan 2 vs other plans
Plan 2 has a higher threshold (£27,295) than Plan 1 (£24,990) and Plan 5 (£25,000), meaning you keep more of your income before repayments begin. However, Plan 2 interest rates are typically higher than Plan 1. Plan 5 (post-August 2023) has a lower balance cap of £37,535 for tuition fees, which makes full repayment more likely for Plan 5 borrowers.
Frequently asked questions
When exactly is my Plan 2 loan written off?
Plan 2 loans are written off 30 years after the April following your graduation (or the April after you left your course). For example, if you graduated in July 2015, your 30-year period started in April 2016 and your loan will be written off in April 2046. The Student Loans Company will cancel the remaining balance automatically — you do not need to apply.
Do I have to pay tax on the written-off amount?
No. The amount written off is not treated as taxable income. There is no tax liability when your student loan balance is cancelled at the end of the write-off period.
What happens if I move abroad?
If you move abroad, you are still required to make repayments. The Student Loans Company sets a fixed monthly repayment amount based on the cost of living in your country of residence, rather than using the UK threshold. You must inform the SLC when you move overseas.
Can I pay off my loan early?
Yes, you can make voluntary repayments at any time through the Student Loans Company. However, whether this makes financial sense depends on whether you are on track to repay in full before write-off. If not, voluntary repayments simply reduce the amount that would have been written off — they do not save you any money.
Will most Plan 2 borrowers repay in full?
The Institute for Fiscal Studies estimates that the majority of Plan 2 borrowers will not repay in full. Graduates with higher-than-average lifetime earnings may repay in full, but those with typical earnings and balances above £40,000 are unlikely to clear the balance within 30 years. Use a projection calculator to model your specific situation.
Find out if your loan will be written off: Use our loan projection calculator with your actual balance and income to see a personalised year-by-year forecast.
Related calculators
This is an estimate only. Speak to a qualified adviser for personalised recommendations. Credibrate is not a tax adviser.