‘University is my biggest regret’: I earn £70,000 and it’s STILL not enough to pay off my student loan

The financial burden of student debt has increased dramatically for the current generation of young people.

In 2012, the maximum annual fee rose from £3,000 to £9,250. More recently, inflation-linked interest rates have seen graduates pay a staggering 7.9%.

Figures recently published by the Student Loans Company showed that almost 2 million people owe between £50,000 and £100,000 on their student loans, with one person owing £252,000.

Anna*, 31, graduated from university almost 10 years ago and says that despite earning £70,000, she is still only paying off the interest on her Plan 2 loan. Here she shares her experience of feeling ‘trapped’ in the student loan system.

Until 2022, I never worried about my student loan.

I hadn’t really thought about it because, as everyone says, it’s the amount you pay that matters, not the balance.

However, when I got my dream job at a large company in London, my salary increased significantly.

I had to move to the southeast, so my living expenses went up, as did my tax payments. Of course, my student loan payments and interest went up significantly as well.

I now pay £4,000 a year towards my student loan, which only covers the interest, so my loan is currently £46,000.

I originally borrowed £37,000 and have now paid off £12,000, so in 10 years the amount has grown to almost £20,000.

I am now 31, so my loan will not be written off until I am 57, if my salary stays about the same. That also does not take into account taking time off work to have children, if I do.

I’m paying about £100,000 for my business degree but I just don’t think it’s worth it.

Even if my salary increases to £100,000, I will still be paying £6,500 a year and I will still not be able to repay my loan as the interest rate is now 7.9 per cent.

If you live near London, it’s not unusual to earn £70,000 and still have to pay rent.

I don’t expect anyone to feel sorry for me, or anyone with a higher salary. But I can’t believe that even if you earn over £70,000, it’s still not enough to pay off your debt and you’re only paying the interest.

You want to pursue your dreams and ambitions and feel like you’re getting somewhere, but now my partner and I are paying £2,000 in rent, tax and then I have to pay off my student loan after tax.

I thought that by taking this job I would really feel the benefits, but in reality it’s not much better than it was.

My net income is only a few hundred pounds higher each month than when I was earning around £40,000.

I am inclined to pay off the loan with some of my savings and extra payments.

I actually paid £19,000 but changed my mind and miraculously got the money back before it was fully processed.

I can’t predict the future and the government can change the rules for student loans at any time. What if the rule for when loans are forgiven was reset to 30 years and I wished I hadn’t made that payment?

When you’re 31, it’s a lot of gambling. I’ve never spent so much money on anything.

The Reform Party stated during the election campaign that all interest on the loan would be waived, so that each payment would actually pay off the loan.

When you hear parties talking about this kind of policy, you think: ‘I can’t take the risk of paying for it all at once’.

I really don’t know what to do. I feel trapped, it’s the biggest regret of my life and I feel like every success I have is being punished.

I was about 18 when I took out the loan, I didn’t understand interest rates and how compound interest works, I feel like people are only now feeling the effects of this because I was the first year going to university with these fees of £9,250.

I work in sales and I think I could have gotten a similar job without having to go to university. I would have preferred to do an apprenticeship or find another route that didn’t leave me with such a large loan to pay off.

Either I’ll leave £50,000 of savings on the table by the time I’m 31, or I’ll potentially pay over £100,000 for my degree, or at worst it could cost £200,000 if I’m very successful.

It has made me feel like all my dreams have been shattered. Much of my job is stressful, but I accepted it for the salary that I no longer benefit from due to increased living expenses and student loans.

I just don’t understand why they set it up this way. The policy makers don’t have this – most of them got their degrees for free.

*Name changed

Do you have a question about your student loan? Get in touch: editor@thisismoney.co.uk