And be aware of the repercussions

he thought the fact Steve had taken the offer to settle his student debt for 50 per cent of its value would have an impact on his credit rating.

He said: “Should Steve accept the offer to settle his student loan early, it is unlikely to have a detrimental impact on his credit score.

“If information about the loan is at some point shared with credit reference agencies, the appearance of a successfully repaid account should strengthen his credit history.

“While a partial settlement flag could be used to explain the lower amount accepted, I don’t think this is likely to influence the outcome of future applications.” That is good news for Steve if he decides to accept the offer to settle.

If it did affect Steve’s credit rating for any reason that James Jones can’t anticipate at the moment, Steve will be able to refer to the documentation he received now to explain why he did what he did, and that the settlement offer wasn’t in any way down to his failure to pay in a prearranged or regulated way.

A student loan is at the bottom end of debt in terms of the rates of interest charged. That would normally mean it could be put to the bottom of the list in terms of it being a priority to repay as soon as you need to, or are able to. But some mortgage lenders are now looking at student debt when they calculate affordability for new loans. That needs to be kept in mind when deciding how quickly to repay a student loan, or whether you should pay it all off if you are in the position to do so.

It’s also interesting to see Steve’s “moral” take on his student debt – that he borrowed the money and therefore has a duty to repay it.

That’s refreshing to see these days when so many people are looking for ways to avoid paying back debt.