Welsh students who received a maintenance loan over the past two academic years can get up to £1,500 of debt wiped off with just one small payment.

While this is standard, the earlier payment is made, the more students will save.

The scheme, passed by the Welsh Government in August 2010, means anyone who got a loan for living costs from from Student Finance Wales for the academic years 2010/11 or 2011/12 can get the windfall as an automatic credit to their balance, once they make their first repayment.

The Welsh Government said in 2010 this was one of a number of measures aimed at ensuring "financial barriers do not deter those students from less privileged backgrounds from entering higher education".

The Student Loans Company says similar systems are not available in the rest of the UK.

The Welsh Government hasn't decided yet whether to continue the scheme for those taking out a maintenance loan in 2012/13. A decision is expected this August.

What's the rush?

Eligible students should make a one-off repayment of any amount early, even if still studying.

Once the up-to-£1,500 sum is deducted, plus whatever they pay off, it won't attract interest, which would otherwise build up, adding to their debt.

You normally only have to start repaying once you earn over £15,795 a year, but you can make a voluntary repayment after receiving your first instalment.

You can then make your first payment to get the deduction whenever you want.

There's no minimum repayment amount, although if done online it has to be at least £5.

How does it work?

While you can get up to £1,500 cancelled, the exact amount is based on the following calculation:

  • Take the maintenance loan received for the academic year in question.
  • Then subtract your payment made.
  • Whatever that figure is, is the amount of debt cancelled (capped at £1,500).

The amount is automatically deducted when you make your first loan repayment.

If you received a maintenance loan for both the academic years in question, the partial cancellation will only be available for one of them.

Am I eligible?

  • You have to be a Welsh 'domiciled' student but you can study anywhere in the UK.
  • You need to have taken out a maintenance loan in either the 2010/11 or 2011/12 academic year from Student Finance Wales.
  • You may not be eligible for a partial cancellation if have failed to keep up payments, or if you are in breach of your loan agreement.
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