5+ Ways to Avoid Paying Back Your Student Loan in the UK (Legally)

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If you are a graduate university student, you are likely landed with a huge university loan. The size of this loan depends on many factors such as your course and whether you lived at home or in university residents. In any case this loan could be somewhere between £20,000 and £60,000. Once students have finished university, they are expected to repay their student loan in full which can take an average of 20 years.

Now this may seem overwhelming, and you may be wondering how you will manage to pay it all back. In this article we will be discussing a few ways in which you can avoid paying back these loans altogether – completely legally of course!

Disclaimer: The advice given in this article has not been given by a qualified financial expert. Therefore, it is important to make sure you conclude your own research before making the decision not to pay back your student loans. 

1. Avoid Jobs with High Salaries

One way to avoid paying back your student loan is to either remain unemployed until your loan is cleared after 30 years, or to remain in employment with a salary below the repayment threshold. 

After you finish studying at university, you are only required to begin repaying your student loan once you earn above the repayment threshold which in the UK is currently £27,295 per year. Therefore, if you earn less than the repayment threshold for the 30 years, your student loan will then be cancelled meaning you will not have to pay it back. 

One way of doing this is to do an apprenticeship after your university study. You could apply for a degree apprenticeship at a postgraduate level for example, to continue learning whilst earning a salary that is likely to be below the £27,295 repayment threshold. For more information about doing an apprenticeship after university, check out this article. 

Additionally, another way is to turn down any promotions in your employment that will cause your salary to increase and go over the repayment threshold. 

Now the obvious problem with this solution to avoiding paying back your student loans is that you are stunting your potential career growth. Once you earn over the threshold the repayments aren’t that large so it may not be worth it. Check out this link to find out more.

2. Go Travelling

Another way to avoid paying back your student loan is to go travelling after your university study. If when travelling you take on part time employment, make sure that your salary is under the repayment threshold. Alternatively, you may decide to travel using your savings. 

If you are living off your savings, you do not need to repay your student loan. Instead, you are required to send information to the student loans company (SLC). This includes bank statements that show the full amount and are dated within the last three months. 

Likewise, if you are travelling you may be required to send the SLC your travel itinerary and bank statements. Additionally, if you are doing part time work, you may be required to send copies of your payslips.  

If you are being supported by someone else such as a parent to go travelling, they will be expected to complete the third-party declaration and send bank statements within the past three months which shows the amount of support you are being given.  

3. Become a Volunteer

Another way to avoid paying back your student loan is to become a volunteer. By becoming a volunteer, you will have no contract of employment, meaning you can decide how many hours a week you wish to work. It also means you will not be paid a salary. 

However, volunteering is beneficial as it will allow you to gain knowledge and experience, will enhance your CV and will improve your employment prospects if you decide to work once your loan repayment has been cancelled. 

If you decide to volunteer, you will be required to send to the SLC a letter from the organisation you are volunteering with, dated, and showing the amount of support you are being provided with from them. 

4. Inform Student Finance of Any Disabilities

Another way to avoid repaying your student loan is to inform student finance of any disabilities you have. If you inform student finance of your disabilities and they then deem you as unfit to work based off your disabilities, your student loan repayment will be cancelled. 

Disabilities that may make you unfit to work may include a physical disability or illness that affects your ability to be employed. 

If you develop a disability after finishing your university study or after you have begun repaying your student loan, informing student finance may result in the rest of your repayment being cancelled. 

5. Does Leaving University Early Get You Out Of Paying Back Student Loans?

A student loan is not quite as straightforward for some students. If you decide that university is not for you and choose to drop out, you may wonder if you still have to pay your student loan back. Unfortunately for you if you don’t like your course and decide to drop out early you will still be required to pay back your student loans.

If you decide to drop out of university, you will have to start repaying your student loan once you have withdrawn from the university. You will only have to repay the amount that has been paid to the university so far. For example, if you drop out of university after a year, you will have to repay the amount for that year, not the full loan. 

6. If You Move Abroad Will You Have To Pay Back Your Student Loans?

If you move abroad, you are still expected to pay your student loan back. After moving abroad, your student loan repayments will no longer be automatic which means after relocating you are responsible for informing the SLC how much you are earning. Then they will set your repayment schedule to take the student loan repayments. 

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