Shown is Cardiff University in Wales, one school where graduates can take advantage of a new Maintenance Loan repayment benefit.
There’s some good news for Welsh student loan borrowers struggling to pay off their debt—they may be eligible to have £1,500 deducted off their balance by the Welsh Government. Students who took out Maintenance Loans from Student Finance Wales in the 2010-11 academic year and after are eligible for the partial cancellation benefit, which takes effect when borrowers make their first payments.
While Welsh borrowers don’t need to start repaying until they are earning an annual salary of at least £15,795, they can make a voluntary repayment in order to earn the partial repayment credit—and the amount can be as little as £5. The amount of the payoff is then based on the amount a student has repaid on the loan.
Students with any outstanding charges, costs, expenses, or penalties on the loan won’t be eligible for the repayment option. And, if a loan is less than £1,500, then the partial repayment amount will also be lower.
Student Finales Wales provides loans and aid for undergraduate students in the U.K. The maximum tuition fee a student can be charged by a publicly-funded university or college there is £9,000, but Maintenance Loans are necessary in order to cover living costs for the student while they are studying. The maximum amount of Maintenance Loans students can take out is affected by their income and their parents’ or partners’ income.
Not unlike the United States, student loan debt is a major problem in the U.K. The average graduate has £44,000 of debt, compared with the average £16,200 faced by those who graduated five years earlier. And, about 70 percent of students who graduated in 2015 are expected to never finish repaying their loans. In addition, one recent study found that 64 percent of U.K. students worry about money either all the time, or very often.
With this in mind, lawmakers have been trying to find ways to help graduates pay off this debt. According to a Welsh Government spokeswoman, “The partial cancellation scheme was designed to encourage Welsh students to attend university if they have the ability and to reduce their overall debt levels.”