Student loan repayments are completely unfair

[Sammy900]

I've thought for ages that student loan repayments are a complete rip off. I'm so glad they are now all going under review.

They were mis-sold at the time as a minor "graduate tax" that you'll barely notice and there weren't any other options available to enable low income households fair access to higher education.

I didn't realise then that this would turn into a lifelong debt, with snowballing interest that makes it impossible to clear.

I'm on the original plan 1 which just goes on and on until I'm 65.

The next plan 1 deal after 2006 then decided that 25 years was a fair term (not 47 years!!). Such a huge difference in what will be paid back.

Any other standard loans have much shorter terms.

It was based on the assumption that you would continue to be a low earner for the rest of your life and not move up the career ladder.

I really think that the government / treasury should look into the fairness of the terms of the original plan 1 loans too not just Plan 2.

I think you can submit your case to your local MP and with the treasury committee if you feel that you are paying back a student loan on unfair terms and now is the time to do so.

I really hope this gains momentum and something can be done about it finally.

What are your thoughts?

Not true. Mine is until I'm 65. Pre 2006 Plan 1.

This should be criminal. Over £100k! For a teacher. We need teachers! We need nurses. There are lots of jobs that require degrees and earn modest salaries.

How can we cripple our young people with debt like this?

How are we going to get teachers for our children? Any young person being in debt like that is so so wrong.

@Sammy900 Well only some are this but you had much lower fees. Only 1/3 of current students. It started off as a smallish loan and cannot be near the current amounts.

I realise I'm coming across as annoying, like a dog with a bone. No offense to anyone and some good points for discussion raised. Hopefully I'll just bore the government to death and they'll give me all my money back 😂(joking, joking)

I know ..I was mis sold or misunderstood as a youngster, like many others that the interest rates would be nothing "the price of a cup of coffee, you won't even notice". Well back in 1999 the interest rates were indeed £2.11 a month. I can't remember if that was a price of a cup of coffee or not, but likely. I didn't realise that some months over the years this would raise to over £100 a month when I could only afford to pay back £34 a year at that time. That it actually meant a life long accumulating debt.

Appreciate my fees were much lower back then compared to today. My personal circumstances are in no way as bad as some graduates have it. Flabbergasted at some stories and I worry for my kids futures. Hopefully all this mess will be sorted out by then or there will at least be different more financially viable routes into professional careers for them.

I graduated at 22 and it wipes at 65 (plan 1). So the older plans are even longer.

I worked out that I should pay my loan off in 7ish years. I see it as a graduate tax and it did not even weigh on my mind during my two mat leaves

i have found out that if you took out your loan through student loan wales they will pay off £1500 off it but you have to apply

At most decent universities the "teaching staff" spend the majority of their time on research. Teaching is a lower priority for academics, and the "holidays" is when they get a clear run at getting their proper work done. It would be difficult to find time to research, attend conferences, and e.g. head over to CERN or wherever for field-work if folk are lecturing freshers on the basics year-round.

@OhDear111 it is based on what you earn yes but still a significant amount of your wage taken, they take £200pcm off me each month (and that will be forever- and only go up) so more than a car payment, it impacted what lelthagw deal we could get, our ability to afford another child.

This is incorrect - original plan 1 loans aren’t written off until you are 65.

I know, I'm not stupid. I'm agreeing with the OP that it disproportionately affects people with caring responsibilities who may not be able to work 40 hours or more a week. I bet there are hundreds of thousands of single parents who end up paying more because their ex ran off with a workmate. They also raised the income threshold for my loan from 15k to 25k.

@IDontHateRainbows University lecturer here. We do not have the same holidays as students! 30 days A/L is the usual. Even students' holidays are technicaly vacations where they vacate univerity premises. Many have a fair bit of work to do incl revising.

If it genuinely was making accommodations for life circumstances that cause you to be a low earner, then you shouldn't have to pay interest while you were on maternity leave or out of work/part time due to children/caregiving responsibilities. Otherwise it's effectively an extra tax on women, both mothers and carers.

It's not "pretty great" at all, when I consider that most average earning men I know of my age who have been able to work full time since university have paid them off while their average earning (pre children) wives/female partners are saddled with loans bigger than they originally borrowed and will be paying them until 65 when they do go back to work and reach the threshold. We will pay more than our male partners for the same education despite earning less over a working life. How is that fair in any way shape or form?

@StevieNic I’m sorry I don’t buy that. You still have plenty left. If you can live in a cheap area, you are ok. It might well be one factor slowing the birth rate, but 65% currently don’t go to university (and 25 years ago it was more like 75%), so what’s their issues regarding not having dc? It’s not student loan repayments is it? The real killer is childcare costs and housing costs. However you want people like the low paid nursery workers to pay for you to go to university. Is that fair? You have benefitted more than them.

There might be some merit in unifying loan length and interest rates over all the plans - economists might have views on this. The plans vary a great deal and some who had much lower fees could more readily pay off the loan. Not all interest rates are the same either. The 40 year loan on current fees is clearly a worse deal than many on the £3000 fee era loans got. My DD paid off her 2010 loan in 5 years.

I think I would prefer to see 30 years but that has led to 50% not paying them off and we are borrowing vast amounts to cover non payments (uk government debt) and it will mostly be down to our dc to deal with our dire finances as defence, education, NHS and benefits will fall to them in ever increasing taxation. Cannot see how that is fair either. We have increased university student numbers without giving sufficient thought to costs and quality of degrees and now degree holders cannot get jobs. 20 years ago this was fairly unusual.

The idea people cannot read the rules is worrying after a very expensive education. Maybe working part time below the threshold is the way forward? It’s a good way of avoiding the payments if you can afford it.

Why should it solely be down to successful graduates to be made to pick up the pieces of a government system that has got out of hand. It's all under review, they know it's unfair. The government needs to make changes that's what needs to happen.

Are you really suggesting that people should go to Uni, have career aspirations, succeed in getting decent jobs with the intention all along of scraping by on a low income in order to purposely never pay their student loan back.

Who would pay all the unpaid loans then? What would be the point of ever having one?

Your argument has gone full circle here

I have received my response from the govt this morning, mandated once 10, 000 signatures are there. It does look as they will be focusing on the unfairness aspect so here's hoping. 100,000 signatures needed for the deba0te to take place. Petitions Committee is independent of the govt

The problem really is that the loans were bought in to offset the massive expansion in degree places - which had the effect of devaluing a degree to a certain extent. For example, when I graduated in 1999, a 2:1 in a STEM subject virtually guaranteed you a graduate job in financial services - these days you need a lot more. There are graduates leaving university now sadfked with huge debt, competing for jobs that used to recruit school-leavers.

@Sammy900 Well lots absolutely do that! My sister for one. Benefits help out. As I said my own DD paid hers off in 5 years. So there’s graduates out there with all sorts of attitudes. Some are ambitious and others do next to nothing and want the government to pay for even more.

I have some sympathy with the argument that the government needs to look at the sheer numbers doing degrees and the 20% and rising who cannot get graduate jobs. They pay very little but their expensive education was not paid for by them. I have said I think the interest is too high BUT it’s because the government is BORROWING the money! It’s not free money. So the government should grasp the nettle of too many grads and too many universities. However parents would be furious about this too! There’s no win win here.

Not all grads are strivers and many just like a little job for years especially if DH earns well. Why do you think the majority were not paying off the loans when they were much cheaper? The debt just keeps growing and it’s our dc who will face the biggest problem due to vast government borrowing and no government willing to say we have to cut back. In 1950 we had 22 universities. Over 150 award offering institutions now? Someone has to payand in essence you think younger people should pay by even higher taxation because you don’t want it yet earn more. I’m not sure how kicking the can towards non grads and younger tax payers is fair as they have the 40 year plans and much much bigger loans.

There is some truth in the "devaluing" of a degree, but it has been balanced by the increase in the % of jobs that do require higher level skills. Expanding higher education was a deliberate act in response to employer demand. Since 2008 though, the economy has had regular seismic shocks - international financial crisis/recession, Brexit, COVID, Ukraine war and now Iran. Coupled with poor political leadership and decision-making, resulting in low business confidence and investment, the UK economy has not been kind to workers of any skill/education level.

https://ifs.org.uk/news/decade-and-half-historically-poor-growth-has-taken-its-toll

I think there is an opportunity to rethink how we fund higher education from the ground up. One thing that strikes me is that there is no compulsion for students to attend lectures or engage with the university. As long as they scrape through the compulsory requirements they get a degree. And we know that there is a world of difference between the graduate who was motivated to make their 9am lectures, participate in seminars, take advantage of all the extra opportunities that universities make available, and the ones who snooze/party/slack off/ChatGPT their way through. The latter category is too big. Lecturers will tell you about some woefully low attendance rates. Student fees and loans don't cover the full economic cost of a degree so these students are costing the tax payer money.

@disappearingfish It has not been balanced though. There’s been an employer led upping of qualifications required so they don’t have to pay for them. They just do post grad training. It’s a different model but not necessarily better. There are 20% of grads who do not get grad level work of any type. Therefore over expansion is around 20%. There’s no balance and it’s a very expensive model and upsetting for those who don’t get the jobs they thought they could.

Not quite, the demand for skills is a global trend driven by technological change, e.g. World Economic Forum's Future of Jobs report (this is part of my profession so I know what I am talking about).

That these jobs haven't been created in the UK is down to more local factors. Take Ireland for example, 65% of 25/34 year olds have a UG degree or higher. It does historically export skills at a higher rate than the UK because it is a smaller economy but it both it's unemployment and underemployment rates are lower, and it's productivity rates are higher. Increasing the % of graduates in a workforce does not erode the value of that degree in a well performing economy.

@disappearingfishLots of those degree holders are immigrants though. We know that’s caused issues with our medical students not getting jobs. We have 6% unemployment in grads and a whopping 41% of grads not in full time employment. (HESA 2025 data). Yet we have paid for their degrees. There’s clearly a mismatch in grads and employer requirements yet we keep finding degrees to keep students and parents happy.

It’s clearly not possible to get all students to study stem degrees but we have far too many on non stem degrees where most unemployment lies. Employers don’t appear to want the grads we produce in sufficient numbers but we keep churning them out. The 2025 data refers to students graduating in 2023. I would be surprised to see improvements in further reports. Hesa data is only as good as data reported to them though.

What do you think about the response?

I have some issues with it but I don't think you are able to make any comments. I can see why, they'd be lynch mobbed!

I don't like the way they make it sound like tax payers and successful graduates are two separate things. Employed graduates are tax payers. You don't get let off from paying your taxes just because you have a degree. However, graduate tax payers also have a loan to pay back with unfair interest on top, some for the rest of their lives.

In real simple terms the current loan system to me sounds like this:

Hey kids, I know you're only 14 but you should really have ambition and career aspirations, throw everything you've got at achieving great grades and you'll do well in life..... Ah, you need a degree for your chosen career....

Are you rich enough to pay for it?, Tuition fees and living costs? Great. ...

You can't afford it? No worries, we'll loan you the money for the degree you need to get. You won't notice it, don't worry about it.

Unless....

You actually have the audacity to become successful...yes yes, well done, but now you need to be penalised for your achievements. In fact for the privilege, you specifically can now pay for everyone else that got an education on loan and didn't pay anything back. Is that ok?

It should be.. you're earning more now so be grateful, we lent you the money when you were poor so here is a ridiculous amount of interest on top to make sure you'll be indebted for life. Never mind if the system is flawed, ignore everything else, you mind your own business.

You could always stay poor and never pay anything back if you'd like? A bit pointless aiming for anything at school / uni then wasn't it really, ooops.

At least I suppose they admitted that they inherited it from previous governments, hinting that it might be outdated and are now looking at ways to make it fairer. I did like that bit at the end. Hopefully it does get some more signatures so it can be debated in Parliament. Thanks for sharing.

@OhDear111 the medical grads situation is shit but is being fixed. The HESA data you refer to is a snapshot of the class of 2023, 15 months after graduating so not a proxy for the value of degrees overall. There’s no doubt new graduates are facing a really tough jobs market right now but the economy is in the toilet so it’s not surprising.

Yes, agree about the bit at the end, the rest was a tad wishy washy.

Your summary of the situation in bold is brilliant, spot on.

Here's hoping. I have 2 Plan 2 sons, both successful I'm happy to say and earn enough to pay back, have done since graduatiing but are very poor! One is a resident doctor