Every month, I repay hundreds of pounds towards a student loan I took out when I was 18, in the year 2012.
When I left university in 2016, this loan totalled around £60,000. A decade of repayments later, and it is £84,000.
Each year, the interest on my loan outstrips the thousands of pounds I pay towards it.
Last year alone, I accrued £5,945 of interest. I would need to have earned around £94,000 just to make repayments covering this, let alone decrease the balance.
I will never pay it off, and instead, will effectively pay tens of thousands of pounds in extra tax compared to those who went to university before me, those who did not go, and those who went but had their parents pay their fees.
There is a whole generation of students who started university between 2012 and 2022 who are in the same position.
In 2012, tuition fees were tripled – from £3,000 to £9,000 a year – and the terms of student loans were changed so that we paid sky-high amounts of interest on the balance.
The interest changes depending on inflation and how much you earn – the more you make, the more interest you accrue – but at its peak it was 8 per cent.
I was among the first cohort of students to be given one of these punitive loans.
We got little notice that the loan system was changing before we had started making plans to enter higher education, having already started sixth form and college in September 2010 – for many a preparation to go to university – before the plans were passed by parliament in December that year.
squareSAVING AND BANKINGNew over-50s savings account with 4% rate launches - the pros and cons explained
Read More
But that’s not my biggest gripe. People often say that when you sign up for university, you agree to the terms of the loans and therefore don’t have a right to complain.
I disagree, and believe we were actively misled and mis-sold the loans that have burdened so many of us with a lifetime of effectively lower incomes.
There are three key reasons why.
Firstly, when the new tuition fees were announced, the Government said that the repayment threshold – the salary level at which payments towards the loan are taken from your earnings – would be set at £21,000 and would increase “annually in line with earnings from April 2016”.
This promise was made explicitly in writing, and is still available on the Government website – but it’s not been honoured properly by successive administrations.
The promise was designed to keep repayments down. As earnings rise to keep pace with inflation, increasing the earnings threshold was supposed to mean repayments would not go up unless a graduate’s earnings rose by more than the average wage.
Instead, although it has risen a few times ad hoc, it was frozen between 2016 and 2018, 2021 and 2025, and will be held again from next year until 2030.
The result is more of our earnings going toward our loans. Usually, when you make a financial agreement, the terms can’t be changed retrospectively. It seems that does not apply to the Government.
The second reason is that the coalition claimed that most universities would only be able to charge £6,000 in fees.
It said at the time that “in exceptional cases, universities will be able to charge higher contributions, up to a limit of £9,000.”
As we all now know, this exception quickly became the rule – in practice, the vast majority of institutions upped their fees to £9,000 a year.
Of course, for my cohort, this only became apparent once we’d already chosen our A-Levels and were already on the path to university.
If the reality had become apparent earlier, many could have opted for apprenticeships or alternative opportunities, instead of paying £9,000 a year for degrees that had cost a third of this a year before.
But the lack of forewarning – and backbone from the Government to enforce what it had said would happen – meant we were burdened with loans far bigger than any of us could have expected.
The final reason I believe we were misled is the suggestion that the student loan system was like a tax.
In interviews to explain the new loans in 2011, the minister at the time, David Willetts, explained: “It is a graduate repayment scheme that has many of the features of income tax. It’s not like some debt around their necks.”
But that reality is not the case – for one, student loans are only repaid by students whose parents were not able or willing to pay their tuition fees up front.
Unless we are returning to medieval times, there are very few taxes I can think of where you can make a one-off payment and avoid a lifetime of payments.
Indeed, the coalition seemed well aware of this issue in 2011, but solving it has fallen by the wayside.
“The Government is committed to the progressive nature of the repayment system. It will consult on potential early repayment mechanisms so that people on high incomes are not able to unfairly buy themselves out of this progressive system,” the coalition said at the time.
In response to this, a consultation was launched, and subsequently, the Government decided not to launch any early repayment penalties.
You can argue on the merits of this, but the overarching problem remains. Richer graduates can indeed buy themselves out of the system easily – if a university-goer has rich enough parents, they can simply avoid ever having to make any loan repayment or accruing any interest.
To make matters worse, in 2012, there was a system in place to partly offset this. The poorest students received maintenance grants that covered some of their living expenses and stopped them from having to take out large loans to cover all their costs.
But in 2015, these were scrapped, leaving the poorest students facing the biggest loans for the rest of their lives. These are set to be reintroduced in the future, but it will, of course, be too late for many.
So why does this all matter?
Your next read
square MONEYI receive PIP and Motability – but I have no money left at the end of the month
square PENSIONS AND RETIREMENT Pensions Crisis CoachI’m 27 and always pay into a pension but I have less than £15k. What’s gone wrong?
square PROPERTY AND MORTGAGESWe were hit by a £10,000-a-year mortgage rise – it was like a tidal wave
square PENSIONS AND RETIREMENTRetired civil servants left in pension limbo with payments delayed for weeks
For years, for those of us with large amounts of borrowing, it has felt like there has been little political will to help.
Those affected by the loan changes have mainly been low to middle earners in their 20s – rarely a cohort that politicians seek to court.
Now, many of us are in our 30s, and some are moving on to become relatively high earners.
As a result, the sheer scale of how repayments will hit our lifetime incomes and savings goals is becoming clear, as well as the impact it is having on the economy.
Luke Craddock, a doctor based in Nottingham, recently tweeted that his student loan was over £100,000. He is repaying nearly £2,400 per year, but his loan is still growing due to the interest.
“This is going to cost unimaginable amounts of money,” he wrote – higher-rate taxpayers with loans pay a marginal tax rate of 51 per cent.
“Many will be reducing hours or refusing extra work. A productivity nightmare,” he said.
As more become aware of the situation, politicians won’t be able to hide from the impact at the ballot box forever.
Hence then, the article about my student loan is over 80 000 and growing here s why i think we were lied to was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( My student loan is over £80,000 and growing – here’s why I think we were lied to )
Also on site :