With respect to the cancellation of Government borrowed Student Loans, the Student Loans Company will cancel loans only under certain circumstances. Also known as loan forgiveness, the circumstances giving the student eligibility for loan forgiveness speak to age, disability, or death.
That being said, the cancellation of Student Loans is not a regular occurrence. Additionally, if a student has borrowed funds by way of private loans, there can be no loan cancellation. The loan must be paid in full, often by the co-signor.
Assuming repayments are maintained, the Student Loans Company will usually cancel any outstanding loan balance (the original principal plus any interest accrued) under these circumstances:
• The borrower reaches the age of 65 before the loan is paid in full.
• Death occurs before the loan is paid in full.
• Or if the borrower becomes permanently disabled, and is unable to work.
Additionally, the Student Loans Company recently added the following circumstance for cancellation for students who began their studies in or after 2006:
• The government will write off any part of a student loan left unpaid 35 years after leaving their course.
The cancellation of student loans exists to aid those who are financially unable to complete repayment. The typical loan term for students in the United States is 10 years after completing the programme, so in that way the UK is rather generous with repayment terms of student financial aid.
If you would like more information on how to cancel student loans, or if your situation of student loan qualifies for cancellation, you should contact the Student Loans Company directly at: 0845 0262019.