'I owe almost £100k – the system is rigged': meet the young people crippled by student loans

Nuala, 25, owes just over £93,000 in student debt, and has yet to start paying it off (Nuala Durkin)
Nuala, 25, owes just over £93,000 in student debt, and has yet to start paying it off (Nuala Durkin)

In 2017, when a then 18-year-old Nuala from west London got into Leeds University to study architecture, she didn’t give too much thought to taking out a student loan.

“It’s just part of the process of going to uni, everyone does it so you don’t really think that deeply about it,” she tells me from Cambridge, where she is completing the final year of her integrated masters. “I just signed up. For most people, it’s the only option.”

Fast forward almost seven years, and Nuala, now 25, owes just over £93,000 to the Student Loans Company and she still hasn’t finished her degree.

“You inspired me to log in [to Student Finance England] and check the balance today,” she says. “I just looked and it and laughed. If you don’t laugh you’ll cry.

“I always used to make jokes like, ‘I’ll be in £100k of debt when I leave uni’, but now seeing that that’s actually true… that’s a whole house deposit of debt, it’s crazy.”

Nuala is one of 1.8 million students who are in at least £50,000 of UK student debt, according to a BBC investigation last week. The report also found that more than 61,000 have balances of above £100,000, according to figures from the Student Loans Company (SLC), while another 50 people owe upwards of £200,000.

25-year-old Paris has been in full-time employment since she graduated, but is in £90,000 of debt (Paris)
25-year-old Paris has been in full-time employment since she graduated, but is in £90,000 of debt (Paris)

In 2012, the Conservative and Liberal Democrat coalition government tripled the tuition fee cap, raising it to £9,250 a year (despite the Lib Dems having famously built their 2010 election campaign around a pledge to abolish tuition fees). England now has the highest undergraduate tuition fees in the developed world, according to the OECD.

Student loan terms have since also been made less favourable – interest rates now sit at almost 8 per cent for anyone who started university between 2012 and 2022, and the loan cancellation date was increased first to 30, and now 40 years after graduation.

We couldn’t have in-person lessons for so long, it was all online...of course it’s not value for money

Paris, a 25-year-old graduate

Between 2020 and 2021, almost 1.2 million students took out a loan, which amounts to 95 per cent of those eligible. Almost all students will see their loans go up by more than they repay this year. For many, the system in its current form is unsustainable: Andrew Adonis, the education minister under Tony Blair, a few years ago dubbed it “Frankenstein’s monster”.

“I’ve had discussions about it with my undergrad friends, and we all just know that we’re never going to pay it off,” Nuala says. “But that doesn’t mean it’s not stressful, it definitely does worry me. There’s just nothing I can do about it. I’ll be losing money out of my paycheck every month until I’m 60.

“I think it absolutely could put people off higher education. If I was 18 right now and I was looking at that number that I owe, I think I might reconsider my options.”

While the student loan burden already acutely falls on the shoulders of young people, it is compounded by the fact that many students saw years of their university experience devastatingly disrupted by Covid, but were never re-imbursed.

Many students had their university experiences severely disrupted by the pandemic, but still had to pay the same fees (PA Wire)
Many students had their university experiences severely disrupted by the pandemic, but still had to pay the same fees (PA Wire)

Paris, a 25-year-old policy worker, enrolled at Goldsmiths University to study PPE in 2018, and found herself in this situation.

“It was a disaster, from start to finish it was a horrible experience,” she says. “I don’t even think about university anymore, I’ve completely blanked it out.”

When the pandemic hit during the middle of her second year, she was forced to move back home to York. “I really didn’t want to have to move back, I wanted to be in London, but we weren’t allowed. We couldn’t have in-person lessons for so long, it was all online, over Zoom. And then obviously we had to pay for university accommodation even though we weren’t there.”

Despite a third of her degree being spent in front of a laptop in her family home, Paris is now in more than £90,000 of debt. She has been in full-time employment since she graduated, and sees around £200 of her monthly paycheck swallowed up by her student loan. A survey by Advance Higher Education from last year unsurprisingly showed that, post-Covid, just 37 per cent of students think their degree is value for money.

“Of course it’s not value for money,” she says. “I feel completely cheated.”

“It’s too depressing to check [the balance],” she continues. “I’m never going to pay it off. In what lifetime am I going to pay off £90k? You pay some of it off and it doesn’t reduce. It’s not like a credit card debt – you think you’ve paid a substantial amount but there’s so much interest that gets added and you think ‘well what’s the point?’”

Students during a protest calling for the abolition of tuition fees and an end to student debt on Whitehall (Yui Mok/PA)
Students during a protest calling for the abolition of tuition fees and an end to student debt on Whitehall (Yui Mok/PA)

Many also feel that the heaviest burden of student loans fall on those from the most disadvantaged backgrounds, since it is these students who qualify for the highest maintenance loan and thus often end up in the most debt.

“I got the maximum maintenance loan,” Paris says. “My wealthier friends took out a smaller loan because their parents earn more. Now they have less debt than me – how is that fair?

“The whole system is rigged from start to finish. It doesn’t make sense.”

There is a tangible frustration that this is one of the many unfair crosses that young people of this generation have to bear, compared to their parents whose higher education was free, or even subsidised. This, combined with sky-high renting costs, an unprecedented cost-of-living crisis, and Brexit curtailing their work opportunities, has left many young people feeling unfairly punished.

“I just don’t see how young people are supposed to thrive in life,” Paris says. “What can we afford at this point?”

Despite now earning a higher-than-average salary of £50k a year, the burden of Paris’ student loan means she struggles to feel the benefit – and that there is little incentive to get a pay rise.

After graduating last year, Joe, 23, owes almost £100k in student debt and hasn’t been able to find a job (Jozef Kostecki)
After graduating last year, Joe, 23, owes almost £100k in student debt and hasn’t been able to find a job (Jozef Kostecki)

“I’m at a point now where pay rises don’t really make a difference,” she says. “When my salary went up, I didn’t even see a difference –  it was may £20 or £30 a month by the time you take into account National Insurance and student loan.”

It’s for this reason that many view student loans more like a tax, rather than a debt.

“Despite the name, Student Loans operate far more like a tax,” says Tom Allingham from Save the Student. “You'll only ever repay 9 per cent of your earnings above the threshold, it won't impact your credit score and your balance will eventually be wiped after 30 or 40 years, regardless of how much you've repaid. With that in mind, it's really important not to frame it in the language of a loan, and instead view it as paying a slightly higher tax rate where you only end up repaying more when you're earning more too."

It’s not a priority for them [political parties], young people are not a priority

Joe, 23-year-old graduate

Since the coalition government tripled tuition fees, universities subsequently benefited from a huge rise in undergraduate funding from just over £10,000 a year to about £16,000.

Universities often point to the so-called “graduate premium” to justify the fees – the difference in the average income between graduates and non-graduates, and thus the value added to individuals’ employment prospects through completing a degree. The median nominal graduate premium in 2022 was calculated by the Office for National Statistics (ONS) at £11,500, which is 42.5 per cent higher than a non-graduate wage. However, once adjusted for inflation, that graduate premium fell to £8,000 – 29.75 per cent higher than a non-graduate wage. Yet these estimates do not account for some huge discrepancies – for example, three in 10 graduates end up with lower lifetime earnings than those who don’t go to university. On top of this, almost a third of graduates don’t even end up in a graduate job.

Joe, 23, from Suffolk has found himself in this boat. Since graduating from London’s UCFB in September last year, he has been looking for a job for ten months. All the while, he has accrued £97,000 of debt of which he is yet to pay off a single penny – like Paris, Joe also qualified for the maximum maintenance loan.

“The figure is ridiculous,” he says. “It’s futile.”

Borrowers were due to face a 12% interest rate in September (Alamy/PA)
Borrowers were due to face a 12% interest rate in September (Alamy/PA)

“Student debt has become completely unsustainable, with thousands of graduates burdened and unlikely ever to be able to repay it,” a spokesperson from the National Union of Students tells me. “Students are suffering a cost-of-living crisis…[we] urgently need to reassess the student loan system. Education desperately needs to be publicly funded, demarketised and free, and instead of burdening students with lifelong debt, we should return to a grant-based system that provides financial support for higher education without placing an overwhelming burden on graduates.”

Having started university in 2019, Joe’s experience was also irreversibly damaged by Covid.

“The first two years, my social life was completely non-existent. It was considerably harder to meet people. When we finally did go back in person in September 2020, we were then sent home again in the middle of November. The quality of education was also impacted, with Zoom classes and stuff.”

Like many young people, Joe feels as though his generation have been left behind by the political system. The incoming Labour government’s manifesto is light on details when it comes to student loans. It did not specifically address changes to tuition fees or debt, but the new education secretary Bridget Phillipson has previously not ruled out any changes to tuition fees, and has said that the government would look at reforms to repayments of student loans.

In May, Keir Starmer announced that he was abandoning Labour’s pledge to abolish tuition fees in order to prioritise tackling NHS waiting lists. The now-Prime Minister said he still believed the system of university tuition had “got to change”, but claimed that the party could not fulfil both pledges.

A Department for Education spokesperson told the Standard: “It is important that we have a sustainable higher education funding system that provides opportunities, supports students and maintains the world-leading status of our universities.

“The Government keeps the higher education funding system under continuous review and we will work with universities to support students and deliver for our economy.”

“It’s a horrible figure to have hanging over your head,” Joe says. “It’s not a priority for them [political parties], young people are not a priority.”