\n<\/p>\n
G<\/span>rowing anger over the plight of millions of graduates saddled with ballooning student loan debts is threatening to develop into a fresh crisis for the government, with Martin Lewis leading the demands for an urgent rethink.<\/p>\n The MoneySavingExpert founder has been critical of the chancellor, Rachel Reeves, over a change to repayment thresholds affecting 5.8 million people who took out a student loan between 2012 and 2023.<\/p>\n Dozens of graduates \u2013 most on the affected plan 2 repayment plans \u2013 responded to a Guardian callout about student loans. Plan 2 graduates currently have to repay 9% of everything they earn above \u00a328,470 a year. The more you earn, the higher your monthly repayments will be. Here are some of their stories.<\/p>\n Amy Cayzer, a 24-year-old communications officer working in the charity sector, graduated in 2023 with a first-class degree. She has already watched her student debt rise by tens of thousands of pounds thanks to interest rates that have been as high as 8%.<\/p>\n Cayzer, who is from a low-income family and was the first to go to university, graduated with \u00a373,814 of debt. This has increased to \u00a393,793, and \u201cwill soon exceed \u00a3100,000\u201d.<\/p>\n <\/span>Amy Cayzer says the scale and longevity of the debt was not fully explained.<\/span> Photograph: Supplied<\/p>\n \u201cIt\u2019s overwhelming to realise that, even though I\u2019m paying every month, it doesn\u2019t make a difference to what I owe. It takes away all hope that you\u2019ll ever be able to pay it off,\u201d she says. \u201cThis is going to be with me for 30 years \u2026 I\u2019ll never be able to get rid of it, no matter how much I pay towards it.\u201d<\/p>\n Friends from wealthier backgrounds, she says, \u201cdidn\u2019t have to pay as much back\u201d, often because their parents subsidised them. \u201cThat just perpetuates inequalities,\u201d Cayzer says.<\/p>\n She was 17 when she first began looking into student finance and 18 when she signed up for it. She says the scale and longevity of the debt was not fully explained. \u201cThe way it was explained, it didn\u2019t really capture the long-term nature of it,\u201d she says. \u201cIt was underplayed.\u201d<\/p>\n While she does not regret going to university, she says the burden now feels \u201cdisheartening\u201d \u2013 and worries it may deter others from similar backgrounds.<\/p>\n Jo\u2019s* student loan debt is about to break through the \u00a3100,000 barrier, \u201cwhich is a horrible milestone\u201d.<\/p>\n The music teacher studied at a top London conservatoire between 2013 and 2017. Since 2024 they have been doing a master\u2019s degree in music education.<\/p>\n This week, Jo\u2019s outstanding student loan debt stood at \u00a399,987. Their plan 2 undergraduate loan accounts for the vast majority of that \u2013 \u00a393,335 \u2013 while \u00a36,000 or so relates to a postgraduate loan.<\/p>\n Jo, who lives and works in London, originally borrowed \u00a362,000 to finance an undergraduate degree, and interest began to be added in September 2013 when the course started.<\/p>\n <\/span>Jo\u2019s student loan debt is about to break through the \u00a3100,000 barrier, \u2018which is a horrible milestone\u2019.<\/span> Photograph: Michael Brooks\/Alamy<\/p>\n By April 2018, courtesy of the interest added every month, their debt had swelled to \u00a370,722, and by April 2023 it had exceeded \u00a382,000.<\/p>\n \u201cI worked out once using an online calculator that I\u2019ll repay approximately \u00a3100,000 to \u00a3150,000 over the 30 years of my loan,\u201d says Jo.<\/p>\n \u201cI feel deeply, unavoidably betrayed by the fact that the older generations pay no \u2018graduate tax\u2019, and yet for wanting to better myself, I am forced to pay a massive chunk out of my income if I work harder to begin saving for a home.<\/p>\n \u201cMy partner and I are left trapped with high rents and a high cost of living, and working more or doing a second job to try to put money aside is now not worth the energy and stress it causes due to a regressive, unfair taxation model. I have nothing against a graduate tax in principle \u2013 just apply it to everyone equally if you studied in the UK in the last 70 years, not just young people.\u201d<\/p>\n Jo adds: \u201cI believe funding study from general taxes is a good thing for the UK and despise the older generations who went to university for not paying their share and lumping it all on my generation.\u201d<\/p>\n William Pratt, a 29-year-old data analyst from Cambridge with a PhD, graduated from his undergraduate degree course in 2018 with a student loan debt of \u00a356,000. Now he owes almost \u00a390,000. \u201cIt\u2019s hopeless. I\u2019m never going to pay it off,\u201d he says.<\/p>\n As well as his original student loan, Pratt borrowed more than \u00a310,000 to do a postgraduate course. His combined repayments are close to \u00a3300 a month, which he says is money that could otherwise be used to meet basic living costs. \u201cWe would be better-off [by] \u00a3200 [or] \u00a3300 a month,\u201d he says. \u201cThat\u2019s my gas paid for, that\u2019s my electric paid for, that\u2019s my car payment paid for.\u201d<\/p>\n The strain has hardened into resentment. \u201cI definitely have felt, over the years, a growing anger towards the older generation,\u201d Pratt says, pointing to the triple lock on pensions. Hearing the chancellor, Rachel Reeves, describe the system as fair, is \u201cvery, very hard to take\u201d.<\/p>\n <\/span>Hearing the chancellor, Rachel Reeves, describe the system as fair is \u2018hard to take\u2019 for William Pratt.<\/span> Photograph: Chris Furlong\/PA<\/p>\n Even as a higher earner, Pratt says the system actively discourages career progression. \u201cI don\u2019t want to earn any more money,\u201d he says, after calculating how much wouldgo to tax, pension contributions and his student finance payments. \u201cUltimately the system is unsustainable.\u201d<\/p>\n Daniel, a 28-year-old engineer from Newcastle, pays \u00a3856 a month towards his student loans. His latest payslip showed \u00a3491 deducted for his undergraduate loan and \u00a3365 for his postgraduate loan.<\/p>\n Daniel graduated in 2020, as the pandemic hit, and chose to do a master\u2019s degree rather than enter a collapsing job market. \u201cI viewed it as a way of pressing pause on life while things sorted themselves out,\u201d he says. He knew the terms were worse than those on his first loan and that he would be adding more to what he already owed.<\/p>\n His total debt has climbed to about \u00a383,000. Only after a recent pay rise did the balance begin to fall by about \u00a350 a month.<\/p>\n \u201cWe were told, as impressionable teenagers preparing to enter adulthood, that the loans would be barely noticeable,\u201d he says. Instead, he now sees the system as \u201cfunctionally a tax on not being rich enough to pay outright for a university education\u201d.<\/p>\n If young people were not making repayments and had more disposable income, he says, it would be spent and circulated rather than \u201cjust being hoovered\u201d out of the economy. \u201cIt\u2019s crap for me, it\u2019s crap for the country and it\u2019s crap for everyone else.<\/p>\n \u201cIt\u2019s no wonder young people are so disillusioned with politics.\u201d<\/p>\n \u201cWe were sold these loans when we were only 17, so legally considered children,\u201d says Nicole, who studied classics at Durham University.<\/p>\n The first member of her family to go to university, Nicole feels she was lied to.<\/p>\n She says the advice from teachers was that the loans would be a tiny percentage of their pay, and it was unlikely they would be repaid in full, with the outstanding balance written off after 30 years.<\/p>\n Now in her early 30s, she works in the heritage sector and earns \u00a335,000 a year. Her monthly repayment is nearly \u00a3150, which is money she \u201ccould really do with\u201d.<\/p>\n Based in Teesside, she bought a house in 2020, and initially it was \u201cdoable\u201d financially. \u201cHowever, with the cost of living increase and my mortgage renewal last year, I\u2019ve had to decrease my pension contribution to keep myself afloat,\u201d she says.<\/p>\n \u201cI left university with \u00a358,000 of debt, and it now stands at \u00a372,000. I checked it a few months ago and, though I repaid \u00a3965 between April and October, the interest (to cover a plan 2 loan and partial master\u2019s loan) added was \u00a31,669.\u201d<\/p>\n \u201cI wouldn\u2019t mind the \u00a3150-a-month payment if the loan amount was actually going down. It is the fact that it never decreases that feels the most unfair \u2026 Mortgages or bank loans don\u2019t work like that. People only a few years ahead of me had fees of just \u00a33,000 a year.\u201d<\/p>\n <\/span>Rebecca says the situation is set to get worse after the budget changes.<\/span> Photograph: Supplied<\/p>\n Rebecca, who lives in Lancashire, was part of the first plan 2 student loan cohort: she studied land economy at Cambridge University between 2012 and 2015. She got some financial help via a bursary and left university with about \u00a335,000 of debt. \u201cI don\u2019t know what it is now \u2013 I don\u2019t want to look!\u201d she says.<\/p>\n Rebecca, 39, says: \u201cWe were told these loans were index-linked with low interest attached, so little real-terms growth in debt. However, no one told us they would keep limiting the threshold at which repayments apply. RPI [inflation] April 2016 to April 2026 was around 53%, but the threshold has only risen 35%. This situation is set to worsen, too, with the budgetary changes announced in November \u2026 I feel a bit cheated because this is not what we expected.\u201d<\/p>\n She says for mums with childcare costs, \u201cwork doesn\u2019t pay\u201d when you have to repay 9% of everything you earn above the income threshold.<\/p>\n \u201cIt does operate like a graduate tax [and] I feel that what I pay is really impacting my marginal tax rate,\u201d she says. \u201cI work four days a week, and I wouldn\u2019t go to five because I\u2019d lose half of it.\u201d<\/p>\n * Name has been changed<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Growing anger over the plight of millions of graduates saddled with ballooning student loan debts is threatening to develop into a fresh crisis for the government, with Martin Lewis leading the demands for an urgent rethink. The MoneySavingExpert founder has been critical of the chancellor, Rachel Reeves, over a change to repayment thresholds affecting 5.8<\/p>\n","protected":false},"author":1,"featured_media":43884,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[22882,13780,7117,3848,3023,393,5343],"class_list":{"0":"post-43883","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-education","8":"tag-ballooning","9":"tag-counting","10":"tag-finance","11":"tag-graduates","12":"tag-loans","13":"tag-student","14":"tag-trapped"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/43883","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=43883"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/43883\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/43884"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=43883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=43883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=43883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\u2018I\u2019ll never be able to get rid of it\u2019<\/h2>\n
\u2018I\u2019ll repay \u00a3100,000 to \u00a3150,000\u2019<\/h2>\n
\u2018I don\u2019t want to earn any more\u2019<\/h2>\n
\u2018I\u2019m paying \u00a3856 a month \u2013 more than my mortgage\u2019<\/h2>\n
\u2018We were sold these loans when we were children\u2019<\/h2>\n
\u2018I feel a bit cheated\u2019<\/h2>\n