Advice for living in Cardiff and the UK, Budgeting, Managing your money

Could you knock £1500 from your Student Loan debt?

Are you a Welsh student (and apply to Student Finance Wales for funding?) Do you want to knock £1500 from your student loan debt?

If you started a course in Sept 2010, or later, and you took out a maintenance loan of at least £1505 in one academic year from Student Finance Wales, then you should qualify to have up to £1500 written off your student loan debt.

This is called the Welsh Loan Cancellation Scheme – snappy title we know! But it means that for some students they will receive a partial cancellation of their student loan debt.

Am I eligible?

If you:

  • applied to Student Finance Wales (SFW) for funding
  • started a course in Sept 2010 or after
  • and received a maintenance loan (for your living costs, not a tuition fee loan) in at least one academic year

Then you should be eligible to have up to £1500 of your loan debt cancelled.

 

How do I get it?

  • Make a voluntary £5 payment

If you wanted to minimise the interest that you pay on your loan then you could opt to make a voluntary payment of just £5 and this would kick start the partial cancellation immediately. So even if you are still in your first year of study, you could pay £5 now and the partial cancellation would be applied now.

*WARNING: To benefit from the full write off of up to £1500, you need to have borrowed at least £1,505 by the time you make your voluntary payment. If you have borrowed less than £1505 and make a voluntary repayment, then the write off will be in line with what you borrowed.

  • Let it be applied automatically

The partial cancellation will be applied by the Student Loans Company (SLC) when you make your first repayment on your student loan. Students automatically enter repayment in the April after they finish their course but you only make mandatory repayments if you are earning over a specific threshold. This is currently £21,000 p/a but it is expected to increase to £25,000 p/a in April 2018. Repayments on the loan are set at 9% of whatever you earn over this threshold. Any loan you have taken (tuition fee loan and/or maintenance loan) will be accruing interest on your account.

 

How many times can I claim the partial cancellation?

You can only claim the write off once, so make sure you do this at the right time for you.

The cancellation will be applied to the first eligible academic year in which you took a maintenance loan.

 

Where can I get more information about the partial cancellation scheme?

The Student Loans Company’s repayment website provides information about all the terms and conditions about repaying a student loan depending on what funding system you fall under.

This website also gives you examples of how the partial cancellation is calculated so you can understand when the best time for you to make a voluntary repayment would be.

 

Who can I ask for help with this?

If you are unsure if you are eligible, or when to make a voluntary payment, then you can contact the Advice and Money Team who will be able to help.

You can also contact the Student Loans Company directly.

 

Best wishes,

Hannah Bundy, Money Advisor.

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