Note (September 2026): In the UK, government student loans from Student Finance are repaid through the tax system only when your income is above the repayment threshold, and the amount depends on what you earn, not on a fixed weekly sum. If you leave your course early you still owe the loan paid out so far, and repayments normally start from the April after you leave. Talk to Student Finance and your university before you leave, and be wary of taking a high-cost loan to deal with student debt. Source: GOV.UK, Repaying your student loan.
Most students normally join different universities and colleges in order to study the course of their dreams. Some students normally complete their courses while others usually fail to complete their course due to one reason or another.
In most cases, students usually take loans in order to facilitate their studies and accommodation. What happens to my student loan if i drop out?
Your loan will remain unpaid when you drop out of university or college.
The following are the loans that will remain unpaid.
1] Tuition loan.
Students are expected to pay tuition fees in order to attend lecture. In some cases, students do not have enough money to pay this fee. This is because some of these students come from humble backgrounds.
Their parents might not be able to raise the tuition fee. In this case, such students might apply for a tuition loan. This fee is normally paid at the start of the semester.
If you apply for this loan, you might get this loan and manage to pay your tuition fee. This loan requires to be repaid in good time so as to avoid penalties. You will note that when you drop out of school, this loan will remain unpaid and it can increase over time.
2] Maintenance loan.
This basically covers your daily expenses. Different students usually have different expenses. These include travel expenses among others. You can use this loan to buy new household items, clothes and so on. You can also use this loan for entertainment purposes.
The amount of loan one can apply for depends on his or her expenses. The higher the expenses, the higher the maintenance fee. In addition, this depends on whether you live away from home or you live at home.
3] Accommodation.
You might choose to rent a house outside the school or live within the university or college premises. University hostels tend to be cheaper than renting outside the university. As long as you live within the university hostel, you will still pay for accommodation.
In addition, if you still live in an apartment away from school, you will still need to pay for accommodation. If you have dropped out of school, you should notify your landlord or university accommodation provider so that you can they can terminate your tenancy period.
4] Grants and bursaries.
Some students normally receive grants and bursaries at different times of the year. Some students are lucky to get grants and bursaries.The good news is that you will not have to pay it back.
In addition, you will have more money to spend while in the university. If you want to leave school and do other activities, you can notify your university finance director so that you will not have to repay back any money in the future. In addition, they will be able to notify the person offering grants and bursaries that you are no longer a university student.
If you fail to clear your student loan in good time, you might be charged higher interest in the long run. You should try to repay the loan in small installments so that you can avoid getting penalized.
You can use your grace period to pay off the accrued interest and start making frequent payments. You can choose to pay as little as £30 per week. You can also consider refinancing your debt. This can enable you to pay your debts faster.
Your student loan will still remain unpaid when you leave school. The interest might increase over time. Choose to repay this loan in good time and you will be able to save more money. This information was provided in part by BadCreditSite.co.uk student loans.
