Should I overpay my student loan? Simulated, not sloganised

The most-asked student loan question has an unpopular answer: for most Plan 2 borrowers, voluntary overpayments buy nothing, because the loan writes off before it clears — the 9% is a graduate tax, and overpaying a balance destined for write-off is a donation. But high earners who WILL clear it face a genuine guaranteed-return decision. This calculator simulates your loan to write-off with the Hundred Summers app's own repayment function and tells you which side you're on. Your figures never leave your browser.

The graduate-tax lens

Treat a UK student loan as what it behaves like: a 9% income tax surcharge with an expiry date. Through that lens the question “should I overpay?” becomes “can I buy out of the tax for less than I'd otherwise pay?” — and the simulation answers it. If the balance dies of old age before it clears, the answer is no at any interest rate. If it clears in your final years, partial overpayment claws little. Only when it clears early does the loan's interest become a real, guaranteed hurdle rate — and a guaranteed 6–7% is genuinely hard to beat after tax.

Two wrinkles the slogans skip: pension contributions by salary sacrifice reduce the income your 9% is charged on — a quiet discount on the loan that favours pensions over overpayment; and the loan never appears on your credit file or affects mortgage affordability beyond the payroll deduction itself. The full Hundred Summers plan carries your loan through every projected year with this same repayment function — see also the repayment calculator and take-home pay calculator.