Student loans- feel sick

[Lazy56789]

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?

OK defo agree with you there! My second one had accrued 6k in interest before I even finished the course!

Back to the early 1960s then @OonaStubbs ?

And if people believe student loan systems are a "con" just wait 'til they look a bit deeper into the Russell Group.

english is not not my mother tongue i learnt it when I was 25, my T9 made a mistake spelling compounding interests. Luckily mathematical and financial rules are the same worldwide and once taught are useful worldwide

It will be likely you have overpaid when factored across the year. You will be able to claim the overpayment back at the end of the tax year. I think you can go back up to 3 years as well.

If you have had bonuses or changed jobs and ended up on emergency tax code you may end up overpaying your student loan for the year.

It is so frustrating that this system has devalued education. Education is power. Frightening people out of getting an education is wrong and it is no wonder society as a whole has gone backwards in terms of social acceptance and community support since student loans were introduced.

As a society we all suffer if young people don’t attend higher education - for hundreds of years higher education has been valued and society progressed. Now it is not valued and society seems to be regressing.

Given progression rates into higher education have increased, plus with number caps, granted not in Scotland, removed I’m not sure how the student loan system, though far from perfect, has actively hindered this @Atina321

I spoke to them last year and this isn't correct - if your income is over the threshold for the year they keep all payments, even if that amounts to more than 9%. I was checking for the year that I was on mat leave, but as I had earned over the threshold in that tax year I couldn't get the money back.

You can claim money back for when payments are taken but your annual income falls below the threshold (so, if you have a low wage job, but a bonus puts you over the monthly threshold, but your total income for the year is still less than the annual threshold)

I'm actively encouraging students to do an apprenticeship. Most of them lead to degrees with their employers footing the costs.

You are wrong.

My husband's loan was sold to Erudio.

He was on the scheme where you only start paying it off if you earn a certain amount. He never has and was reaching the end of the term so started getting payment deals eg if you pay half now, we'll wipe the rest of the debt.

I dont know if it has happened on the other schemes too. Not mine. Im still paying barely the interest on mine. Life time loan!

ETA- BBC link https://www.bbc.co.uk/news/business-25084744

Edit to the above - the article suggests other loans have been sold too.

My husbands terms were changed (only paying half) so Id imagine other terms changed too.

@Theteenandme I take it you didn’t notice that the article you posted is from 2013.

12 years ago.

we are now in 2025.

I’ll repost the very recent link from a few months back that explains the history of student loans, what loans were sold off and when.

This. Just think of it as a graduate tax where a small amount comes out of your pay check each month until you retire and then forget about it. Most people never pay it off as there’s not enough graduate jobs and those that do exist don’t pay high enough that you’ll ever make a significant dent. Just forget about it and let it tick over in the background. It doesn’t affect your credit score, go on your credit file or considered at all when applying for a mortgage, loans etc.

Very different story in America where student loans are treated more like actual loans so people panic about it more over there.

The mental gymnastics from some posters on here who don't want to admit they've been royally shafted by their own government in terms of the interest add on for many years making the repayments far more than the initial loan!

Nobody is doing any mental gymnastics. Most of us are saying that the payments - if you do make payments - aren't onerous and that we're OK with never paying them off. On balance, it's a pretty good borrowing system compared to most other ones.

here you go @Theteenandme From July 2025 - ie about a month ago, not 13 years ago.

https://researchbriefings.files.parliament.uk/documents/SN01079/SN01079.pdf

Section 6 is dedicated to Student Loan Sells Off. Starts on page 31.

I'm on plan 1 and plan 2 first year was plan 1 then year 2&3 on plan 2. I earn 24k a year and doubt I'll ever pay it off.

I very quickly realised there's no point trying to pay it off because I'll never be able to pay it off in full before it's written off. Only 12 more years to go 😂. I'm going to have a party when it's finally gone 😂.

Statistically, women are much more likely to benefit from the terms, and aren't the ones who end up in the trap of slowly ramping up to £80k over a decade or two, not making payments fast enough to get ahead of the interest, but with a high enough salary that the payments are hundreds a month, indefinitely.

Who cares if other people are paying huge amounts every month if you've been working part time on £20k a year since you had your first child ten years ago?

It's just the 'don't worry about it' 'its a tax not a loan' comments that seem a bit self delusional. You basically have to pay to be employable these days, and its really not a good deal compared to the past where people either got a grant or free tuition, or before that didn't really need a degree for a career in most professions.

No I didnt. 🤣 However, it doesnt change the fact that my husband's loan was sold (and only in the last 5 years or so I think (definitely not 12 years ago) which you said didnt happen.

Old days aren’t coming back anytime soon, though, are they? It’s been like this for 27 years. You want something, you pay for it like most things in life. I’m on my third degree, all were loan funded, and it really is no big deal. I’ll never pay it all back and it’s fine.

However, it doesnt change the fact that my husband's loan was sold (and only in the last 5 years or so I think (definitely not 12 years ago) which you said didnt happen.

@Theteenandme

I can see where we have got our wires crossed. From my point the last student loans sold date back to those starting repayment in 2009 - so no-one who has graduated post 2008 has had their student loan sold, But their actual sale date - taking your point - was not until 2018.

The last and final sale of student loans covered loans coming into repayment between 2007 and 2009 - so those who graduated between 2006 and 2008. The decision was taken by the government and the sale completed in December 2018.

This is the parliamenary statement confirming the 2018 sale https://questions-statements.parliament.uk/written-statements/detail/2018-12-04/HCWS1137

The 2020 Budget confirmed there woud be no further sales of student loans. A positiion that the current Labour government has not changed.

Old days aren’t coming back anytime soon, though, are they?

absolutely @paranoidnamechanger - great name by the way. Plus people tend to forget that the basic rate of tax has not always been 20%.

Like your husband, I was on the old style 'mortgage' loans, and mine was also sold off to erudio. They're a nasty bunch, a debt collection company rather than a SLC who operate more like a bank. I think they paid the govt about 15p for every £ of debt when they bought the loan book, and they were initially quite aggressive at chasing. But by now almost every mortgage style loan will have hit it's 25 year expiry (when they get written off), so all they have left are the toxic debts of long term defaulters.

Erudio also offered me several settlement deals, best one was about 25% of the debt. I didn't take it because I'm in deferment and my loan expires next year.

It was a much fairer and more generous system back then though - no tuition fees, so only modest loans on offer, and the interest rate and deferment thresholds pegged to genuine inflation figures (one year the debt actually reduced, when inflation went negative).

The newer loan schemes are awful by comparison, I think some can have interest rates at 6% above inflation? Clearly the govt is making money out of this, just disguised by being hidden in the public coffers. Many people are going to end up paying back far, far more than they actually borrowed, due to the punitive interest rates. This is what effectively makes it a tax. By contrast, my loan debt has approximately doubled over the 25/30 years since I first took it.

You are exactly right. Students often get stick I find from those who did not go to university… However the reality is that the government actually secretly make money out of us!! It’s a con really.