Age write-off

New lending is subject to a 25-year maximum term (35 years for Scottish domicile students) because of the changes to the age entitlement for new maintenance loans. Existing customers retain their existing rights for both new and existing borrowing, however. Consequently there are now two kinds of ICR loan:

1. Lending to customers who borrow for the first time in 2006/07 is written off if not repaid within 25 years (35 years for Scottish domicile students). This applies to students who:

• enter higher education in 2006/07 (whether or not following a gap year);
• entered higher education before 2006/07, but elected not to draw down a student loan in previous years; or who
• entered higher education before 2006/07 but were not eligible or entitled to receive a student loan in previous years, but who become eligible for one of the loan products in 2006/07 because for example of the changes to the age rules for maintenance loans, and elect to draw it down.

2. Lending to other customers is written off at age 65. This applies to account holders who:

• obtained a student loan in 2005/06 or in some earlier year, and who are continuing students.

Special arrangements write-off

All lending is also written off on death (the account holder's estate must provide the death certificate) or permanent disablement or illness (if the account holder is likely to be permanently unfit for work, the account holder or someone acting for him under Power of Attorney must produce a statement to this effect from the relevant medical authority).

In practice an account holder in these circumstances and whose repayments are collected through the tax system will not as a rule incur a repayment obligation since being unable to work again is likely to have no earnings against which a repayment obligation could be assessed. However, since this account holder may have a source of unearned income, it may still be necessary to apply for the write-off.