Meet the Other Phone. Flexible and made to last.

Meet the Other Phone.
Flexible and made to last.

Buy now

Please or to access all these features

AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Student loans- feel sick

603 replies

Lazy56789 · 29/07/2025 07:15

I did a degree around 15 years ago, and a Masters around 10 years ago.
A repayment is taken out of my salary each month based on my earnings, but when I received a letter from student finance today I saw my balance was 41k! And over 2k in interest was added in the last tax year.

It's terrifying, I'm not in a position to pay off huge amounts, how does anyone do it? The figures are eye-watering, I feel like i must've done something wrong for it to be so high?

OP posts:
Thread gallery
7
TeenLifeMum · 29/07/2025 22:40

silverspringer · 29/07/2025 07:22

That’s not true because it’s a factor in mortgage affordability.

Weirdly they don’t include it in mortgage calculations.

Gyproc · 29/07/2025 22:41

I should say that calculator assumes a steady increase in earnings every year, with no breaks. So not very reflective of many women's lives, many would have some time paying much less and most teachers don't see their pay jump up at the end of their career.

However, it does still beg the question should the model be that someone from a family with a very low income (and therefore eligible for and needing the full loan) starting on an average grad salary pay back over twice the amount borrowed?

ConstantlyTired312 · 29/07/2025 22:59

Just think of it as a student tax, eventually you will start to make a dent but it definitely feels like a long time!

If your first loan is 15 years old, at least both your loans are plan 2 - I am being rinsed for interest because I have a mixture of plan 1 and 2 loans, and they're only paying the second one off, meaning the first is just accruing interest, even though I pay in more than the interest payments each month - make that make sense!!!

Also, plan 2 loans are written off after 30 years, another bonus that plan 1 loans don't have (until I'm 65!)

easylikeasundaymorn · 29/07/2025 23:25

Juniperberry55 · 29/07/2025 22:32

No-one is saying they shouldn't have to pay it back. People are generally complaining about the ridiculous interest rates. Last year I was charged varying levels of interest between 6.25%-8% it basically makes it incredibly difficult to pay off your student loan as even on above average salaries you are basically only paying your interest. Do you not think the interest rate should be more reasonable? How much is your interest rate on your mortgage at the moment, I imagine far lower than the interest rates on student loans. People end up paying far more than the original loan and their debt isnt wiped for 25-40 years depending on when they went to uni. Should we just charge people until they die?

but this is what people are saying, it doesn't really matter what the interest rate is if you're never going to pay it all back. If it's wiped off after 25/30/40 years it doesn't make any difference to you whether there's 20p left or twenty grand.

e.g. currently if you earned the national average wage of c. £36k you'd be paying back about £60p/m

£60x12, x30 = £21,600 paid over 30 years. The current average student loan for english students is £53k, so even if not a penny of interest was charged that person wouldn't come close to paying off even what they took out, ignoring inflation (which is the reason interest rates are so high).

Yes at some point they would hopefully earn more than average wage (although they might not) - but for the first few years of their career they might earn a lot less, and might not even hit the threshold to pay anything back at all. So it might be something like 10 years paying back 0, 10 years paying back an average of £60, 10 years paying back an average of £120, to end up with the same amount.

Even if you were earning quite a bit more and paying back £100 p/m, (with the same averages) that's still only £36k, nearly £20k less than what you took out.

So a pretty good deal really.

Juniperberry55 · 29/07/2025 23:31

easylikeasundaymorn · 29/07/2025 23:25

but this is what people are saying, it doesn't really matter what the interest rate is if you're never going to pay it all back. If it's wiped off after 25/30/40 years it doesn't make any difference to you whether there's 20p left or twenty grand.

e.g. currently if you earned the national average wage of c. £36k you'd be paying back about £60p/m

£60x12, x30 = £21,600 paid over 30 years. The current average student loan for english students is £53k, so even if not a penny of interest was charged that person wouldn't come close to paying off even what they took out, ignoring inflation (which is the reason interest rates are so high).

Yes at some point they would hopefully earn more than average wage (although they might not) - but for the first few years of their career they might earn a lot less, and might not even hit the threshold to pay anything back at all. So it might be something like 10 years paying back 0, 10 years paying back an average of £60, 10 years paying back an average of £120, to end up with the same amount.

Even if you were earning quite a bit more and paying back £100 p/m, (with the same averages) that's still only £36k, nearly £20k less than what you took out.

So a pretty good deal really.

I took out 11k and my loan has increased to over £13k. I earn over average wage
Last year I paid more than £1200 in total, only £300 came off the balance. At this rate I will pay far more than the £11k I borrowed . Many multiples but at such a high interest rate, it won't be cleared until it is written off. So yes the interest rate does matter. If it was a more reasonable rate I would have some chance at paying it off before it was written off and would therefore have my income reduced for less time as once it was paid off , I would no longer have the deduction from my wage

suburberphobe · 29/07/2025 23:44

It gets wiped after 30 years I think

Fucking great, to have that hanging over you for so long..... NOT!

In my day university was for doctors and scientists.

Nowadays it's for people who want to extend school days while lying in bed

Juniperberry55 · 29/07/2025 23:48

suburberphobe · 29/07/2025 23:44

It gets wiped after 30 years I think

Fucking great, to have that hanging over you for so long..... NOT!

In my day university was for doctors and scientists.

Nowadays it's for people who want to extend school days while lying in bed

Ah yes, doctors no longer require a university education 🙄

ThisTicklishFatball · 30/07/2025 00:01

DangerousAlchemy · 29/07/2025 21:17

So you're going to limit your kids by making them attend a local Uni and live at home rather than get a student loan??? OK then 🙄🙄 & if they want to study abroad or live away from home then that's a no is it?? Jesus Christ. & your kids get a say do they?

The local university offers a wide range of academic subjects and ranks within the top 30 in the league table for many disciplines. In 2025, there are already alternative ways to earn money besides obtaining a university degree. Additionally, train fares are significantly cheaper than covering living costs.

You're the one insisting on burdening your children with unnecessary debt, believing that university is the only viable path. Even worse, you assume that no other universities outside Russell Group's institutions provide education as good or even better than those in other parts of the country.

PloddingAlong21 · 30/07/2025 07:16

I think the general view and perception on the value of degrees are changing from when many of us were younger. Rightly so.

Many of us were told it’s the next best thing in education and we would need to go in order to get high paying jobs. This simply isn’t true. Numerous people have degrees and aren’t in well paid jobs, saddled with debt. Many people are in high paying roles where they’ve worked their way up (most obvious one being IT Sales. I’ve worked for American companies my whole career. Sales are paid very very highly).

I believe kids are now being made aware of the various paths available and there is much more push on apprenticeships, which often are more valuable. People have so many skills to offer the workplace beyond being Academic.

Uni is no longer simply about “going for the experience” - which many people I knew did and went for the general degree of “business studies”. This was the course everyone took when they wanted to go, but didn’t really know what they wanted to do. I almost opted for that myself. We need to start advising kids that a degree must be useful for it to be worthwhile, due to the costs. Why do we still have so many pointless degree courses? (I’m not suggesting business studies to be totally useless).

I won’t be encouraging my son to go to Uni, unless it’s for a degree he needs for his desired profession.

I did a Law Degree, didn’t enjoy it so didn’t want to work in that field. I’m lucky I’m a higher earner now and paid my loan back - but it’s that, luck. My degree contributed zilch to my current earnings. I worked my way up from entry level. I spent years paying back (not as much as some here as I was on the lower fees pre 2005 and some maintenance loans. I saved those up during the year and paid my parents £200pm to stay living at home. I planned to study Law for 7 years but left after 3 and getting my LLB).

Uni these days often simply isn’t worth it.

As a few have said the loan does impact mortgage - your affordability assessment specifically, as it’s still an outgoing.

Younger generations will all be stuck in a cycle of debt due to the high taxes and high costs everywhere - regardless of earnings. It’s going to be very difficult for anyone to ‘do well’ financially, even if higher earners. House prices are so high nobody buying in the coming years will even make much in equity, so the saying “safe as houses” is also no longer applicable. We are taxed so highly, higher earners will eventually be handing most over or funding pensions as they become ineligible for state pension etc. Schools need to start educating young people on financial management, pensions, mortgages etc. Most of us don’t learn this until we need them, when it’s too late.

Did anyone do general studies at school? Utterly pointless class. Maybe it isn’t a ‘thing’ nowadays. That should have been repurposed to Financial Management class.

Well, that’s me gone off a total tangent….

sexnotgenders · 30/07/2025 07:25

Evisam · 29/07/2025 11:42

We encouraged our DC to take the loans as we had no idea what sort of earners they would be.

DD borrowed 28k (fees) plus 18k (maintenance) = 46K. By the time she had finished her course she owed 52k. Interest, sometimes up to 10%, was added from day one of her degree. The compounding was eye-watering.

When DD graduated she started her job on 33K. When I finished my degree I was on 12k, 30 years later I earn 48k. So my wage is x4 more over 30 years. I estimate that DD will be on 130k in 30 years time.

I put her details into an online student loan calculator. She now earns 42k. It calculated she would pay back 105k over the 30 years, but still owe 56k (which would be written off). These are bonkers figures with the compounding of interest tripling the initial amount borrowed even with thousands being repaid each year.

https://www.student-loan-calculator.co.uk/

We decided to pay the whole loan off and get DD to save for her own house deposit with the money saved in monthly repayments.

So you had a spare £52,000 available to pay off your daughter’s student loans, and she herself earns over £40,000? I think it is absolutely your situation where the state shouldn’t be subsidising education and the loan, with interest, is fair and proportionate. I’m sure you’ll go on about all those ‘sacrifices’ you made to make that payment, but yet you still had the luxury of accessing that about of cash and your daughters salary certainly suggests she benefited from her degree

Sadworld23 · 30/07/2025 07:57

titchy · 29/07/2025 09:39

Except you don’t have to repay it. Most won’t and it’ll be wiped in 15 years.

Please don't give this advice to anyone, it's wrong.

DangerousAlchemy · 30/07/2025 08:21

ThisTicklishFatball · 30/07/2025 00:01

The local university offers a wide range of academic subjects and ranks within the top 30 in the league table for many disciplines. In 2025, there are already alternative ways to earn money besides obtaining a university degree. Additionally, train fares are significantly cheaper than covering living costs.

You're the one insisting on burdening your children with unnecessary debt, believing that university is the only viable path. Even worse, you assume that no other universities outside Russell Group's institutions provide education as good or even better than those in other parts of the country.

Edited

lol you're making huge leaps there! Where in my post did i mention Russell Group Unis? Will your kids have to live at home for the whole 3 years of their degree? in which case they aren't experiencing Uni life to the full & you aren't preparing them to manage finances, live alone, cook every day for themselves, do all their own washing & manage their own time etc. Uni was the only viable path for my DD 3 years ago when she decided to study Chemistry. She's 2nd highest in her year at Uni now, on track for a First plus just completed an amazing (paid) work placement year at a fabulous institution doing lab work. Oh this is my DD btw who has social anxiety and is a huge introvert and is a different person to the one who finished her A Levels 3 years ago. Her Uni course and life there has totally shaped and changed her. That wouldn't have happened if she'd gone to a local Uni and commuted in every day. Oh and sge chose a non- Russell Group Uni despite having top A Level results. So maybe stop judging. Uni is NOT the right path for every kid but it was 100000% the right choice for my DD. maybe take another look and see that your rationale is not the only one 🤷‍♀️

Evisam · 30/07/2025 08:23

sexnotgenders · 30/07/2025 07:25

So you had a spare £52,000 available to pay off your daughter’s student loans, and she herself earns over £40,000? I think it is absolutely your situation where the state shouldn’t be subsidising education and the loan, with interest, is fair and proportionate. I’m sure you’ll go on about all those ‘sacrifices’ you made to make that payment, but yet you still had the luxury of accessing that about of cash and your daughters salary certainly suggests she benefited from her degree

@sexnotgenders No sacrifices, we have had money from inheritance as in the last 15 years I have lost 3 grandparents and both parents. It means I have no family left (I am at the top of the family tree aged 54). None of my family were high earners (or graduates)- fireman, housewife, prison officer and auxiliary nurse, but they had homes in the midlands that I benefited financially from.

Rather than getting 4.6% interest (minus 20% tax) in the bank, I decided to pay off the student debt at 7.6%. I really needed money in my 30s when I was paying for 2 children at nursery, a high mortgage and a house extension. I have inherited in my 50s when I don't need the money. I am just paying the money forward and giving DC an early inheritance and saving them thousands in interest over the years. In 30 years time, when wages will be 100k plus a year, paying 9% back of your wage will be massive.

DangerousAlchemy · 30/07/2025 08:32

XenoBitch · 29/07/2025 22:01

Nope. A few decades later, I did attempt uni again. Didn't take out a loan, but had a small NHS bursary. I was on placement where they lived so stayed there. They wanted half of it, even though it didn't even cover the parking fees for my car... and I was literally just sleeping there. Got my own food etc. Was there 4 days a week.

Christ! Are you still on good terms with your parents?

Juniperberry55 · 30/07/2025 08:57

paranoidnamechanger · 30/07/2025 08:47

Despite what some people here want to believe, applying to study at university is still a popular choice for some young people:

https://www.ucas.com/corporate/news-and-key-documents/news/uk-universities-and-colleges-see-record-numbers-of-uk-18-year-old-applicants

Uni is still a popular choice, it doesn't mean the student loans aren't ridiculous and have such high interest rates that those students may end up paying back their loan for 40 years until it gets written off due to the high intensity rates.
Alot of the 18 year olds going to uni now will have parents that may have had tiny tuition fees of £1000 a year maybe £3000 a year, if they went to uni after 2006.
Most parents of 18 year olds won't have experienced the £9000 tuition fees from 2012 with the RPI+3% interest. They may still be in the mindset that it's all worth it and they'll get it paid off in a few years like they did. I think if we give it a few more years, I think parents who have realised how poor value the student loans are in a lot of cases, will be encouraging their children to get a career another way, some may still go to uni regardless of advice and some may be going on to do courses that will be highly likely to achieve a very high income and still worth it.
Unless student loans are changed in the next few years, I can see alot of children being discouraged from uni.

easylikeasundaymorn · 30/07/2025 08:57

Juniperberry55 · 29/07/2025 23:31

I took out 11k and my loan has increased to over £13k. I earn over average wage
Last year I paid more than £1200 in total, only £300 came off the balance. At this rate I will pay far more than the £11k I borrowed . Many multiples but at such a high interest rate, it won't be cleared until it is written off. So yes the interest rate does matter. If it was a more reasonable rate I would have some chance at paying it off before it was written off and would therefore have my income reduced for less time as once it was paid off , I would no longer have the deduction from my wage

Yeah because you dropped out which is obviously not what the system is designed around!

you paid £11k for one year (not really sure how as that suggests you only got £2k for a maintenance loan, most students get much more than that)
You say yours will get wiped off by around 52/53 which suggests you would only have graduated c. 2022 even if you had stuck the course.

As above the average student graduating then will be £50k plus in debt. Even you who somehow survived on £2k would owe £33k

You can't say the system doesn't work because YOU didn't use it properly!

And, again, interest rates are high not for shits and giggles but because they track the. RPI, which, together with the BOE interest rate has been high for the last few years.
Yes that sucks for students but it also sucks for mortgage holders and anyobe trying to buy food, you're not alone. It benefits savers.

When I graduated a few years after the recession my interest rate went down to zero for a few months because the BOE rate was so low - mortgages were also cheap (although I couldn't afford one!) but you got nothing on savings accounts and there weren't any jobs going.

That's how the economy works!

If you only paid off exactly what you took out, then the lendee (govt) would make a huge loss, because by 2052 £11k would be "worth" pennies.

Juniperberry55 · 30/07/2025 09:13

easylikeasundaymorn · 30/07/2025 08:57

Yeah because you dropped out which is obviously not what the system is designed around!

you paid £11k for one year (not really sure how as that suggests you only got £2k for a maintenance loan, most students get much more than that)
You say yours will get wiped off by around 52/53 which suggests you would only have graduated c. 2022 even if you had stuck the course.

As above the average student graduating then will be £50k plus in debt. Even you who somehow survived on £2k would owe £33k

You can't say the system doesn't work because YOU didn't use it properly!

And, again, interest rates are high not for shits and giggles but because they track the. RPI, which, together with the BOE interest rate has been high for the last few years.
Yes that sucks for students but it also sucks for mortgage holders and anyobe trying to buy food, you're not alone. It benefits savers.

When I graduated a few years after the recession my interest rate went down to zero for a few months because the BOE rate was so low - mortgages were also cheap (although I couldn't afford one!) but you got nothing on savings accounts and there weren't any jobs going.

That's how the economy works!

If you only paid off exactly what you took out, then the lendee (govt) would make a huge loss, because by 2052 £11k would be "worth" pennies.

"You say yours will get wiped off by around 52/53 which suggests you would only have graduated c. 2022 even if you had stuck the course."
I'm on plan 2 - I started the course in 2012, debt is written of 30 years after the first April after you left, left aug 2013 (so first April April 2014) my balance would be wiped in 2044. I'll be just about to turn 53. So no I wouldn't have graduated in 2022 unless I did a ten year course.
I'm not saying people shouldn't pay any interest but does it not seem crazy to you that people are charged high interest, whilst they're still studying. By the time they have the ability to start paying it back their loan has gone up by thousands of £s
I have said several times I'd be happy to pay back the loan + interest. But the point it they way they apply the interest is unfair. It starts at 4.3% (RPI at the moment) then when you start earning enough to start paying it back then interest rate goes up, so as you earn more and start paying back more, the interest rate actually increases by another 3%.
You say it's been shit for mortgage holders but I can guarantee the average fixed mortgage rate was not 8% in August 2024 when they charged me 8% that month. They say they cap the percentage if it goes above market rates, but I could get just below 4% interest on a new mortgage and fix it for years. Student loans are constantly changing rates. And as for the market rate cap, I don't know if they're comparing against pay day loans to know when to cut off the interest rate as I certainly wouldn't be getting an 8% loan

OneAmberFinch · 30/07/2025 09:21

itsmeafterall · 29/07/2025 21:11

Please read martins money who explains how it actually works and why seeing the total you owe is total nonsense.

I found it hugely reassuring

The thing is, you're not wrong...

...but this is just symptomatic of the entire British relationship with money. It's not a real unit of value that has any meaning. Everything is Monopoly money, sort of play tokens that don't align to anything meaningful. There are actively negative consequences if you try to treat the play tokens as real money (e.g. paying extra off).

(See also: "I paid in to pension all my life" - with child benefit play tokens)

It's no wonder people say they come out of school with no knowledge of personal finance.

Hoardasauruskaren · 30/07/2025 09:49

I try to look at it as a tax on higher education& just dont think about it it as I would get annoyed! What doesn’t sit right is that higher earners will pay much less interest than those of us on more average salaries as they will pay it off faster. Not really fair on the likes of nurses/AHPs/ teachers who will never earn high salaries but are in important jobs. They will most likely pay it till it’s written off! Also students from low income families will have bigger loans than those from richer backgrounds! Yet another inequality for our younger generations who are already seeing inheritance creating a divide!

Mydadsbirthday · 30/07/2025 10:10

toughtimestoday · 29/07/2025 07:27

Don’t think of it as a debt but as a tax. In fact if you can bring yourself below the threshold to pay it off by making additional pension contributions then do it. Paying more into a pension is far more beneficial than paying this off. I’m about to do a second degree at 54. I’ll end up with a starting debt of around £45k. It will never get repaid back before I die!

Wow, and what benefit to society will your second degree bring, or is it just an additional burden for taxpayers?

Overthebow · 30/07/2025 10:21

Hoardasauruskaren · 30/07/2025 09:49

I try to look at it as a tax on higher education& just dont think about it it as I would get annoyed! What doesn’t sit right is that higher earners will pay much less interest than those of us on more average salaries as they will pay it off faster. Not really fair on the likes of nurses/AHPs/ teachers who will never earn high salaries but are in important jobs. They will most likely pay it till it’s written off! Also students from low income families will have bigger loans than those from richer backgrounds! Yet another inequality for our younger generations who are already seeing inheritance creating a divide!

They’ll pay more interest but will likely not pay off their loan. A high earner will likely pay it off completely. So they will probably end up paying similar amounts to each other.

VanessaFence · 30/07/2025 11:47

I try to look at it as a tax on higher education& just dont think about it it as I would get annoyed! What doesn’t sit right is that higher earners will pay much less interest than those of us on more average salaries as they will pay it off faster.

And this is why it isn't really a tax on higher education. Low earners will pay almost nothing but those in the middle could end up paying multiple times what a higher earner pays over their lifetime due to the compounding interest.

I had a chat with my partner last night comparing our understanding of student loans aged 18. We were both under the impression that this was a super low interest, fixed-rate loan. I remember being told that paying it off in a lump sum was stupid because the interest rates were so low you'd be better just putting the money in a savings account. I was genuinely shocked when I looked at the statements and figured out what the actual terms were.

lilkitten · 30/07/2025 11:53

Not sure how yours works, though I found something on Money Saving Expert that breaks their terms down. I would imagine it's more like a tax though, so that you'll pay a percentage based on income, and if you're below a threshold you'd stop paying. I started mine in 1996, when thresholds were high (and it even went into negative territory as the interest was set at minus 2% of the base rate), and it got wiped off in 2023 (25 years after my last payment). My DP has high student debt due to being a doctor, but we try to think of it as a tax not a debt. Hard for him to forget it's hanging over him though