Can you go to prison for not paying student loan UK?

No — you cannot go to prison for not repaying your student loan. However, if you're self-employed and deliberately evade repayments, or live abroad and ignore demands, SLC can take legal action to recover the debt through county court. This is rare but possible for persistent non-payers.

Do student loans affect your credit score UK?

UK student loans do NOT appear on your credit report and won't affect your credit score. However, they reduce your take-home pay (through PAYE deductions) which affects how much mortgage lenders will offer you. Lenders factor in student loan repayments when calculating affordability.

What happens if I don't earn enough to pay my student loan?

You only repay when earning over the threshold (£25,000 for Plan 2, £27,295 for Plan 5 in 2025/26). If you earn less, you pay nothing and no action is taken. The loan doesn't go into arrears — it's designed to only be repaid when you can afford it. If income drops, repayments automatically reduce or stop.

What Happens If You Don't Pay Your Student Loan UK — Complete Guide | PocketWise

Q: What happens if you don't pay your student loan UK?

If you're employed and earning over the threshold, repayments are automatically taken from your salary — you can't choose not to pay. If you're self-employed or living abroad and don't pay when required, SLC can charge penalties, add interest, contact HMRC, or pursue through debt collection. It won't affect your credit score but can result in legal action.

What Happens If You Don't Pay Your Student Loan UK — Complete Guide

What happens if you don't repay your student loan, can't afford it, or ignore SLC. How repayments work, avoiding arrears, self-employed rules, living abroad, and when loans get written off.

By PocketWise · 29 March 2026 · 7 min read

Student loans work differently to normal debt — you only repay when earning over the threshold, and the loan is eventually written off. Here’s how it all works and what happens in different scenarios.

How Student Loan Repayment Actually Works

Automatic Repayment (If Employed)

Detail	How It Works
PAYE deduction	Taken automatically from salary
You can’t opt out	Mandatory once over threshold
Employer deducts	Like tax and National Insurance
Shown on payslip	As “Student Loan” deduction
No choice in amount	Fixed percentage of earnings over threshold

Key point: If you’re employed and earning over the threshold, you can’t “not pay” — it’s taken before you receive your salary.

Repayment Thresholds 2025/26

Plan	Annual Threshold	Monthly Threshold	Repayment Rate
Plan 1 (pre-2012)	£24,990	£2,082	9% of earnings over threshold
Plan 2 (2012-2023)	£27,295	£2,274	9% of earnings over threshold
Plan 4 (Scotland)	£31,395	£2,616	9% of earnings over threshold
Plan 5 (from 2023)	£25,000	£2,083	9% of earnings over threshold
Postgraduate Loan	£21,000	£1,750	6% of earnings over threshold

What You Actually Pay

Annual Salary	Plan 2 Annual Repayment	Monthly Repayment
Under £27,295	£0	£0
£30,000	£243	£20
£35,000	£693	£58
£40,000	£1,143	£95
£50,000	£2,043	£170
£60,000	£2,943	£245
£80,000	£4,743	£395

Scenarios Where Problems Arise

Self-Employment

Situation	What Happens
Self-employed, over threshold	Must make repayments via Self Assessment
Don’t include on tax return	SLC will be notified, demand payment
Ignore demands	Interest added, potential legal action
Can’t afford	Contact SLC to discuss — they may consider circumstances

Living Abroad

Situation	Requirement
Leave UK	Must tell SLC within 3 months
Working abroad	Income assessed against UK threshold equivalent
Different currencies	Converted to GBP
Don’t update SLC	Fixed amount may be demanded
Ignore demands	Debt can be pursued internationally

Mixed Income (Employment + Self-Employment)

Situation	How It Works
PAYE job + self-employment	PAYE deductions taken + Self Assessment calculation
May overpay	Can claim refund from SLC
Must declare both	On Self Assessment tax return