Many students won’t finish paying back their loan debts

The number of British graduates owing more than £100k in student loan debts has shot up from 200 to 6,531 in a single year.

That’s an increase of over 3,000 per cent and, tragically, it’s showing no sign of slowing down.

High interest rates and stagnant wages are thought to be behind this debt increase.

According to the Sutton Trust, British graduates owe the most student debt in the English-speaking world. Cumulatively, £161bn is owed by 5.6m British graduates to the Student Loan Company.

A student who wrapped up their degree in 2021 and earns £30,000 a year will pay back £244 this year but will accumulate £976 in interest.

The Institute for Fiscal Studies estimates that just one in ten graduates will actually fully repay their student loan debt during the 30-year window before it’s wiped out.

In spite of this, loads of grads will end up repaying way more than they borrowed in the first place. One graduate actually owes £175,830 to the Student Loan Company- the largest debt owed by any student.

National Union of Students Vice President Hillary Gyebi-Ababio told The Times: “Student debt and financial insecurity are getting worse, and NUS research has identified that more than two in three students are concerned about their ability to manage financially.

“We’re hearing from students who can’t even afford to travel to their university library, and we know that students are relying on buy-now, pay-later loans from companies like Klarna which only compound the debt crisis.”

Universities minister Michelle Donelan added: “The government has always been clear that where it can help with rising prices we will, and I will always strive for a fair deal for students, which is why we have reduced the interest rate on student loan down from an expected 12 per cent.

“The government has always been clear that where it can help with rising prices we will, and I will always strive for a fair deal for students, which is why we have reduced the interest rate on student loan down from an expected 12 per cent.

Featured image: Shutterstock / Katherine Da Silva (edited)

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