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?

Just to be clear for other people, there are also other plans. I fell foul of this when even Martin Lewis didn't mention the other plans, which I think mainly apply to students in NI and Scotland.

Watch MSE video on this as it’s very good. Do not make any one off lump payments. Most people won’t pay it back.

When you finished a levels in 1987 it was possible to get decent jobs without degrees. When I went to uni in 2006 there were very few different options. We were told to go to uni, thats what the government wanted. Polytecnics were rebranded as Unis to get more people through degrees. We were told the student loans were the best loans we’d ever have and the uni fees wouldn’t be a problem as we’d just pay a small % of our earnings each month. I graduated with £30k in loan and 15 years later I’m paying over £200 a month whilst also paying nursery fees and wraparound for my DCs which have also hugely gone up in price.

I wouldn't read too much into the poll - I put YABU because you haven't done something wrong and don't need to panic - it will be wiped eventually and doesn't count towards your other debt or credit score, so don't worry.

Whether the fees should be there is a different question, and it's unfair that interest on fees is so high and based on RPI for sure. Especially now that a lot of our salaries are not increasing in line with CPI, never mind RPI.

I pay £6 a month on my loan. Absolutely
Pointless. I will never be able to clear it.

I earn £29k a year thanks to working less due to childcare and how extortionate it is.

How much was the total debt before you started paying it off ?

I think I've paid £100 total off mine since I left in 2009! Even when I worked full time I rarely earned enough to pay it back then since the kids came along I've only worked part time.

I've just looked at the threshold and it's £26K which I think is a bit over full time minimum wage so I won't be paying it back for at least another 5 years. In the next year or so I'll be doing 30 hours on minimum wage until my youngest is in year 8, I can go full time in my job after that but if I want to pursue an actual proper salary it's going to take some time to job hunt.

It doesn't concern me, it gets written off and it hasn't had an impact on our mortgage or borrowing yet. My husband has paid his off completely but he was sensible and went into a well paid industry unlike me who decided hospitality was the way forward 🙄

I didn't think we were meant to pay it off? I swear mine was about 12k from getting maintenance grants. We got a letter a few years ago and now it is 60k. It's a bit pointless putting interest on it tbh. If they kept it at 12k and made me pay it off I probably would have. 60k- not a chance. Costs me 100 per month. I need a degree for my office job so I don't mind paying it but all seems a bit silly really.

This...

I'm surprised you're surprised that only paying £660 a year for loans with interest for two degrees means you're not close to paying off those loans.

Nobody forces anyone to go to university so you sign up to these loans and you sign up to paying them back, like any loan and as loans go, its terms and conditions aren't too bad. The people who are screwed are the high earners who're paying for childcare, have huge mortgage repayments and huge student loan repayments which they'll pay off after decades.

I don't pay much every month and won't ever pay them back, so it's no big deal. There's no point overpaying when you have a large sum owing like I do unless you're overpaying huge amounts.

Martin Lewis is very clear on this the vast majority of people will never repay their loans fully, just let them take the minimum from your wage don’t waste money repaying what you don’t need to.

There's not much you can do about it though unless you have the money to pay it off in one chunk. I have over £13k in student loans going down by maybe £200 a year once interest has been added. I think mine will be written off around 52/53. Sometimes you just have to accept you'll basically have an additional tax on your payslip until it is written off.

Did you get value from your degree? Would you do it again if you went back in time?

The student loans thing is shit but a necessary evil when we send so many people to university. Find a better option. And suggest it to the political party who'll listen.

There's an argument to make that if your degree doesn't pay back the you shouldn't have done it.

It is incorrect to say not to pay lump sums off. If you are likely to pay it all off the quicker you do si the better as it can save you thousands in interest. Each individual situation is different. Yes if having done your degree you choose to do a minimum wage job or just over minimum wage job then you should just pay what is legally deducted. If you earn well the quicker you can repay the better.

It’ll likely get written off. Make sure you look fully into the specifics of the exact loan/s you took. To look at it positively, as it’s quite an old loan, it will get written off quicker. The newer ones seem designed to have people paying back even when they are pensioners - and paying back many times over. They are a fucking con imo. People would be better advised to take two gaps years working whilst living at home to save money and/or attend a nearby uni or to do a degree apprenticeship. It just seems to the the standard done thing to go off to a uni 3 hours away with a loan.

this must be weighed up against the write off date so may be wrong advice

Try not to to think/worry about it. You’ve been paying it off for the last 15 years, nothing is changing, just keep going as you are.

If the Student Loan is that bad why not extend the mortgage and pay it off. It can be paid off at anytime.

The idea is thst a university degree should give yiu a good enough salary to be able to pay it off within a reasonable timeframe.

the problem is when you dona degree that does not lead to a 50+k salary with a view to increasing.

student loans will be tbe next banking crisis. Within a decade the student loan company will collapse and the government will bail it out. After that, universities will be able to set their own fees, with no student loans, and only the very wealthy or the rich foreign will afford it. It will be be back to the medieval times when only a few went to uni. Us plebs will be back to eating potage.

As I said, watch the MSE video. Most won’t pay it off, if you get a lump sum bonus and pay it off that money has gone forever, you could invest it and make more than the loan interest and still not pay your loan off.

It’s disgusting and a huge trap. They apply interest at eye watering rates each year. What happens is at the beginning of your career, you pay nothing or minimal amounts, but never paying more than the interest, so within a few years, you’ve barely touched it, by the time you may be earning a good wage, you owe more than you started within due to interest, you pay a substantial amount back but it never touches the sides because of the interest being applied every year. I pay around £200 a month and it’s not making a dent, Ive resigned myself to the fact I will continually pay towards it for the remainder of my working life. They design it so you never pay it back and always owe, the only way you get out of it is if you secure a low interest loan and pay it off or you are lucky and have some one who will lend you the money interest free and pay them back.

Not quite "after 30 years" on Plan 2; the 30 year factor starts from when the first repayment is made, which, based on the rates for 2025/26 tax year, won't happen until someone is earning at least £28,470 a year and payments will also stop when income falls below this. Even then the repayments start at a very low level, but of course interest is added from day one of the first payment, bearing in mind that payments made to universities are in three parts each year, so payments start soon after the course does, and interest is applied accordingly.

I know this because I am a mature student, having gone to university in 2022 and completed one year aged 45, but then had to defer for two years due to life getting in the way. This is the first time I've ever had the chance to do a degree.

Based on my life experience and knowledge of how basic finance works, I think the student finance system is one hideous fuck up. Huge amounts of interest are applied to loans that will never get paid off by a great many people, whilst others will earn a lot more and end up paying vast amounts back to cover their loans and the interest.

I can't understand why the loans aren't at a much, much lower interest rate, and interest deferred until the course ends, but everyone being made to make straightforward repayments from the outset of going into the workplace. At the moment it seems to rely on those who end up paying all their loan and interest back to subsidise those -like me- who won't pay much back at all.

My course has a £5K bursary attached to it, which I intended to use to pay towards my student loan. So far, the £5K I was given has sat in a savings account for almost three years, as reducing the capital seems to be a daft thing to do in my situation, knowing that I will only pay a small amount back, given what I plan to earn once qualified, and the number of years I plan to work for. I've worked since I was 16 and I don't intend to be working all through my 70s.

I intend to save all of my bursary payments and use that to subsidise the repayments for as long as I can, once the repayments start. But to repeat what I said at the start, the system is utterly bonkers, totally confusing, and I can think of no other loan quite like it.

I left after my first year of uni despite it being a sensible choice course, it was ran terribly and I left. Uni fees went up to £9k a year when I went, I think there might have been maybe another couple £k in maintenance and now the interest rates are appalling. I have no chance in getting it paid off before it gets written off, despite the fact I've found a decent job.
It does seem crazy that 18 year olds can make a decision to get £30000 of debt from education and pay it for the next 40 years with some of the new plans. Why does the interest rate change when everything else you go into debt for, you can fix the interest rate or shop around.
It does seem appalling to me that my mortgage is charging 2% less in interest and even when I'm paying over £100 a month, the vast majority is eaten up by student loan interest.
Considering the government want young people to be educated and contribute to the economy, surely it would make sense to lower the interest rates or cut the tuition fees for courses that are deemed important for the economy

Yes absolutely should be weighed up against write off date which is why I specifically state each individual case is different.

So only the wrong advice if the payer doesn't weigh up their personal situation, earnings etc. With the new plan (40years) with over 50% paying in full it makes sense for the mid earners to pay off quicker to pay less interest if they can. High earners pay less back because they already pay it off quicker so if they can chuck more in they pay even less. Those unlikely to repay in full should just pay mandatory amounts so to take "advantage" of the write off.

I’m in the same boat OP - but as another pp suggested, treat it more like a tax. It’s relative to how much you earn, and there’s the possibility of it being written off too. So try not to worry. I’m plan 1 as well. I studied 2010-2013. I pay around £100ish a month from my salary.