Student loans: more like a tax than a debt

A UK student loan doesn't work like a credit card or an overdraft. You only ever repay a percentage of what you earn ABOVE a threshold, straight from your pay — and whatever's left after a set number of years is written off, with nothing more to pay. That makes it behave far more like a tax than a debt.

You repay a share of income, not a fixed bill

Repayments are 9% of what you earn over your plan's threshold (6% for a Postgraduate Loan). Earn under the threshold and you pay nothing that month. The balance and its interest don't change what leaves your pay — only your salary does.

It gets written off

Depending on your plan, anything still owing is cancelled 25, 30 or 40 years after you were first due to repay. For a lot of graduates the loan is written off before it's ever cleared — which is a normal outcome, not a shortfall.

Why paying extra can cost MORE

Here's the counter-intuitive bit: if your loan would be written off anyway, every extra pound you throw at it is money you didn't have to pay — so the total you pay over your life goes UP, not down. Extra payments only save money if they clear the loan BEFORE the write-off date, which depends entirely on your future income. And unlike savings, money paid in can't be taken back out.

So how do you know?

You can't know for certain — nobody can predict your future pay. The repayment calculator lets you try different salary-growth guesses and watch how much the answer swings. That swing is the honest answer: for some careers clearing early saves money, for many it doesn't. This is information to explore, not advice on what to do.