Martin Lewis, founder of Money Saving Expert, has outlined four ways your student loan debt can be wiped out. In a new one-minute guide shared on social media, the personal finance guru explained that university debt can be cancelled for several reasons, including death, disability, time limits, and full repayment.
Four Ways to Wipe Student Loan Debt
According to Lewis, the first way to clear the debt is by paying off the full amount borrowed plus all accrued interest. The second way is if the borrower dies, at which point the debt is automatically cancelled. Thirdly, the debt is written off if the borrower is deemed unlikely to ever work again due to physical or mental illness. Finally, the debt is cancelled after a set period, which varies depending on when and where you started university.
Writing on Money Saving Expert, Lewis said: "Current students from England now need to wait 40 years after leaving university before their loans will be wiped, their predecessors only 30 years. Yet there are more options even than that, it all depends on when and where you started university."
Plan 2 Loan Changes
The guide comes amid rising criticism of the student loan system, particularly regarding Plan 2 loans. These loans apply to undergraduate courses and postgraduate certificates of education taken since September 1, 2012, in Wales, and between September 1, 2012, and July 31, 2023, in England. The Chancellor announced in the autumn 2025 budget that the repayment threshold for these loans would be frozen for three years at £29,385 from April 2027. This means more graduates will start making repayments earlier, as they repay 9% of their income above the threshold.
Interest on Plan 2 loans is charged at the Retail Price Index (RPI) inflation rate plus up to 3%, depending on earnings. The Government earlier this year capped interest at 6% from September to protect graduates from rising inflation during the war in Iran.
Understanding the Time Limit
Lewis added: "To ensure you understand the process: when you have a student loan, you're eligible to repay it after you leave university and once you earn enough (exactly how it works depends on which loan type you have), but you’re only eligible to do that for a set time." He explained that some graduates will clear their loan in full before the deadline, while others will have the debt automatically written off after the time period expires, regardless of the amount remaining.
The time limit for English students has increased from 30 to 40 years for those starting university now, meaning borrowers may be making repayments for decades before the debt is wiped.
