UK Student Loans

Because student loan debt is written off after at the end of the loan term and repayments are income contingent,

they are a good insurance  against future low  income, unemployment and death! ( they’re written off if you die too)

So  you are enjoying a really good income now, and you’re on track to pay off your debt in 5 years with your current career trajectory.   You’ve got the spare cash to pay off you remaining debt now.  Why not? It makes sense to avoid all the accrued interest over the next five years, right !

So you pay off your £50K debt and

•  The next day you die
•   You fall seriously ill within 3 years and can only find low  income work thereafter
•   You’re made redundant in 4 years (by AI) -  unemployed for 2 years, retrain for another year, modest salary thereafter
•   You fall pregnant after two years, decide take a 3 year career break and then return to part time work

  It’s almost always a bad idea to pay off your student debt or “over pay”

•   You would never pay off you debt at 9% over threshold even if interest free
•   You have other debts - best to pay these off first
•   You could earn more putting the money in a savings account, ISA or investment

Contrary to lot of misconception, student loans are affordable, because they are income contingent , and the accruing interest rate is not extortionate.  

Try getting a unsecured loan on £50+K for 30 years from a lender at under 10% pa! And of course with a commercial loan there  is no debt write off!

Check out your own circumstances by going to the “Payback Years” tab of  the “Student Loan” Google sheet