I Paid Off £45,000 in Student Loans by 26 — Here’s the Exact Plan

By the First Wage Editorial Team · Published 18 September 2026 · 12 min read

The Loan Nobody Warned Her About

Priya graduated in 2020 with a business degree, £45,000 of Plan 2 student debt, and a starting salary of £27,000 in a marketing role in Manchester. Like most graduates, she assumed the loan would just quietly come out of her payslip for the next thirty years and either get paid off or written off, and she’d never think about it much beyond that.

What changed her mind wasn’t a spreadsheet — it was a promotion. Eighteen months in, her salary jumped to £41,000, and she watched a single month’s payslip where the student loan deduction was larger than her council tax and her phone bill combined. “I did the maths on what 9% of everything above the threshold was going to look like for the next decade, and it genuinely shocked me,” she says. “That’s when I actually sat down and worked out whether paying it off early made sense.”

The Numbers She Actually Ran

Plan 2 loans (for English and Welsh students who started between 2012 and 2023) charge interest at RPI plus up to 3%, depending on income, and are written off 30 years after the April you first became eligible to repay — regardless of how much is left. For most graduates, that write-off is the real ending point, not full repayment.

The maths problem is this: if you’re on a modest graduate salary, you will likely never pay off the full balance before the 30-year write-off arrives, because the 9% deduction barely keeps pace with interest accruing on the balance. In that situation, voluntary overpayments are close to pointless — you’re paying money towards a debt that would have been cancelled anyway.

Priya’s case was different for one specific reason: her income was rising fast, and she expected it to keep rising. She modelled two scenarios using her own projected salary growth (a realistic assumption in her industry, not guaranteed) — one where she made only the standard payroll deductions, and one where she added a fixed £300 a month in voluntary overpayments. In the first scenario, her running balance was still around £38,000 by year 8, still a long way from cleared. In the second, with overpayments compounding against a smaller principal earlier, she was projected to clear the loan entirely by year 9 or 10 — comfortably inside the 30-year window, meaning every pound of interest saved was a real saving, not a saving on a debt that would’ve disappeared anyway.

Why This Isn’t Universal Advice

This is the part that gets lost when these stories get shared: Priya’s decision only worked because her salary trajectory was unusually steep for her age. If you’re on a typical graduate salary progression, voluntarily overpaying a Plan 2 loan is very often money you’ll never see the benefit of, because the loan would have been written off regardless. Before doing anything like this yourself, the first real step isn’t opening a standing order — it’s projecting your own likely balance against the 30-year write-off using your actual plan type and a realistic (not optimistic) salary forecast.

The Actual Plan, Step by Step

Step one: work out your write-off date. This is fixed to the April after you left your course, not to how much you owe — find yours before doing anything else.

Step two: model your balance under standard repayment only. Use your current salary and a conservative, not hopeful, growth assumption. If the projected balance at year 25–30 is close to zero anyway, overpaying gains you very little.

Step three: only then model overpaying. If — and only if — standard repayment leaves a meaningful balance still outstanding near the write-off date, overpaying can genuinely save you money, because you’re pulling forward a repayment that would otherwise happen at a higher interest cost, or avoiding write-off leaving real value on the table for higher earners specifically.

Step four: protect your other financial priorities first. Priya didn’t start overpaying until she had a full emergency fund and was already contributing to her workplace pension up to the match. Voluntary student loan overpayments are the last thing on the list, not the first, because — unlike a pension match — a student loan overpayment doesn’t come with any employer top-up.

Step five: make it a direct, separate contribution. UK student loan overpayments can be made directly via your Student Loans Company online account, entirely separate from payroll deductions, and can be stopped or paused any time — there’s no penalty for changing your mind.

What She’d Tell Her Younger Self

“I don’t regret doing it, because it worked out for my specific numbers,” Priya says. “But I’d tell anyone reading this to actually run their own numbers first, properly, before assuming paying it off early is automatically the responsible thing to do. For a lot of people it genuinely isn’t — and the loan being written off isn’t a failure, it’s the system working as designed.”