Page 4 | To not class student loan as ‘real debt’

Mamamamamm · 2026-03-16T19:25:24+00:00

I read a story recently of someone saying about the interest on student loans and that they went up to £40k a year and it meant more interest was being added on to their student loans so they were no closer to paying it off. They said they had sat their children down and said that they should really think about if they really wanted to go to university because of the amount of debt. Now, let’s forget about the principle of it - that it costs so much yet you’re training so you can contribute to society etc. But , you only pay the monthly payments once you’re earning over a certain amount . The amount you pay also depends on what you earn. So for example , I am on just under £30k so pay £7 per month , I’m due a promotion that will take me to £40k and it will go up to £86 per month -but , I’ll be getting an extra £500 per month in my take home so it won’t affect me really as it’s just like tax , NI - it’s going before you get your take home and nothing you can do. So each time you earn more, yes it’s taking more but it’s not going to leave you short ?? It’s also something that is written off after 30 years so you’ll never pay it off anyway and won’t have to pay it if you lose your job , payment will reduce if you take a lower paid job etc . Yes I’m sure it’s annoying to see that balance not really going down but it’s not something that affects your credit score . Am I being naive here ? Surely it’s not a reason to deter your children from going to uni ? It’s like saying don’t earn more because you’ll pay more tax ? Genuinely don’t get it , please feel free to educate me if this is a really naive view !

MidnightMeltdown · 18/03/2026 12:36

I think the issue is more that the graduate premium has been eroded. Certain graduates doing certain degree subjects may earn significantly more than people who haven’t been to university. The rest leave with a massive debt and earn little more than non-graduates.

I assume that you’re still young OP, but as you get older you’ll realise that 40k goes nowhere these days.

OhDear111 · 18/03/2026 13:22

@FriedFalafels As @Badbadbunny points out, where are these starter jobs? Even if young people know what career they want, can they get a training job? It’s extremely difficult so many opt for university to hone skills and get better advice. Of course too many end up in lower paid roles but they didn’t think they would when they started the degree! In many ways it’s not finance that’s missold, it’s some degrees!

Martin Lewis was not wrong. Loans are paid back in salary. For some it’s a very cheap education. For the average earner, the 40 years means they pay more! It’s not the high earners who pay more. Plus no one gets a full loan unless they qualify for it. It’s not a choice! It’s means tested. How on earth are poorer folk going to afford to go with no bank of mum and dad? Of course they need the loans but too few get high paying jobs and don’t see the need to either. That is not the fault of Martin Lewis.

We don’t all have high quality universities on the doorstep offering even all the academic subjects. We have long had a tradition of going away to university because we don’t all live in major cities. In 1950 we had 22 universities. Look at what we have now and we need a conversation about converting some back to colleges of HE to support business and having a variety of options for 18 year olds.

FriedFalafels · 18/03/2026 14:10

OhDear111 · 18/03/2026 07:58

@Alexandra2001 £90 a month is not bad for a job with decent prospects and a career structure though. Someone earning minimum wage for years might see that as a decent price to gain a lot of money.

@FriedFalafels So what about the history grad who wants to convert to law then? Or a psychology grad who wants to be a journalist? It’s obviously impossible to just have degrees for dedicated careers with no flexibility.

As for degrees being £3,000 - obviously they cannot cost that. The true cost, the universities say, is £12,000 plus. So the current level underprices them and the overseas fee is often treble the uk student price. If we insist on keeping the vast number of universities and 37% of school leavers going, someone has to pay. There’s nothing wrong with the premise that the person who gains pays.

The big issue is rule changes and too few paying back the loans because many degrees are not leading to good enough earnings. However young people are still willing to take the punt due to lack of alternatives. The tax payer ends up
paying for most degrees as the loans are not paid off. The 40 year plan penalizes lower earning grads as they pay for longer. Quite simply, most grads don’t earn enough. So we do desperately need jobs where young people train from age 18 but they are so hard to get. University is the default position. It does give thinking time but it comes at a cost.

As I’ve mentioned previously, I responded to the OP saying if a career didn’t need a degree, then there may be better routes. I didn’t specify particular careers.

You have made assumptions about where my view point is coming from in my post, which are incorrect.

Alexandra2001 · 18/03/2026 15:37

OhDear111 · 18/03/2026 07:58

@Alexandra2001 £90 a month is not bad for a job with decent prospects and a career structure though. Someone earning minimum wage for years might see that as a decent price to gain a lot of money.

@FriedFalafels So what about the history grad who wants to convert to law then? Or a psychology grad who wants to be a journalist? It’s obviously impossible to just have degrees for dedicated careers with no flexibility.

As for degrees being £3,000 - obviously they cannot cost that. The true cost, the universities say, is £12,000 plus. So the current level underprices them and the overseas fee is often treble the uk student price. If we insist on keeping the vast number of universities and 37% of school leavers going, someone has to pay. There’s nothing wrong with the premise that the person who gains pays.

The big issue is rule changes and too few paying back the loans because many degrees are not leading to good enough earnings. However young people are still willing to take the punt due to lack of alternatives. The tax payer ends up
paying for most degrees as the loans are not paid off. The 40 year plan penalizes lower earning grads as they pay for longer. Quite simply, most grads don’t earn enough. So we do desperately need jobs where young people train from age 18 but they are so hard to get. University is the default position. It does give thinking time but it comes at a cost.

At £47k pa, its nearer £150 pm...

On your premise "The Student should pay" they are, twice, a NMW earner pays less than £200pm in Tax and NI.
The £47k earner is paying over £800 per month in Tax and NI but also an additional £145 in Student loan.

£200 vs £945.....

Remember too, £47k also means, unlike someone on NMW (with kids and rent) they'll be getting benefits, on £47k you wont be.

MumbleBumbleAppleCrumble · 18/03/2026 17:27

I agree, at least in terms of how I felt. Uni 20+ years ago and mine was minimal. It came straight out of my pay alongside tax and NI and pension and I viewed it alongside those. Almost more like a deferred university tax payment or tax something.
Nowadays I don’t know. It’s getting very expensive. But, yes, I suppose the way to view it is still along those lines. It is technically a debt and has interest rates and such. But I have a mortgage and I don’t really see that as a debt either. Obviously it is. But it’s also paying to live somewhere, and, personally, I’d far rather pay to live somewhere I can call my own and will hopefully one day have after mortgage is paid, than to have carried on paying rent and having the uncertainties and the temporariness that come with that.
I imagine that lots of people are put off University because of the cost. That’s dreadfully sad, and really it should be free and so accessible by all. But, politics and ideals aside, it’s an investment as anything else is (mortgages, pensions, NI) and should be seen as that rather than an albatross that will hang around your neck.

Badbadbunny · 18/03/2026 20:15

MumbleBumbleAppleCrumble · 18/03/2026 17:27

I agree, at least in terms of how I felt. Uni 20+ years ago and mine was minimal. It came straight out of my pay alongside tax and NI and pension and I viewed it alongside those. Almost more like a deferred university tax payment or tax something.
Nowadays I don’t know. It’s getting very expensive. But, yes, I suppose the way to view it is still along those lines. It is technically a debt and has interest rates and such. But I have a mortgage and I don’t really see that as a debt either. Obviously it is. But it’s also paying to live somewhere, and, personally, I’d far rather pay to live somewhere I can call my own and will hopefully one day have after mortgage is paid, than to have carried on paying rent and having the uncertainties and the temporariness that come with that.
I imagine that lots of people are put off University because of the cost. That’s dreadfully sad, and really it should be free and so accessible by all. But, politics and ideals aside, it’s an investment as anything else is (mortgages, pensions, NI) and should be seen as that rather than an albatross that will hang around your neck.

I think the problem is that more and more people are going to be suffering the student loan repayments for 30/40 years, i.e. virtually their entire working life, whereas in the past, when loans were smaller, it was a lot easier to pay them off so people would be happier thinking they'd only be paying the loan repayments for maybe a quarter or a third of their working life (if they were working full time and earning a fairly decent salary). Nowadays, some forecasts show that you need to be earning an average of £60/£70k p.a. to pay off the loan and at that kind of income, you'll be repaying it for the full term. It's only the much higher earners now that'll pay it off sooner and therefore not pay as much interest, which creates a kind of "circular" calculation because the interest doesn't rise so much in the first place if they're paying it down quicker! The increase in course fees from £3k to £9k p.a. and the increase in housing costs meaning increased maintenance loans required, added to the increase in interest charged is a triple whammy.