I've just cleared my student loan

I have some celebratory news blended in with a rant…

Today, I phoned up the Student Loans Company and paid off my entire student loan debt — the remaining balance stood just south of £16,000.

I began my university degree in 2010 and graduated in 2013, meaning I was on a Plan 1 loan. Tuition fees were capped at £3,290-a-year back then, and maintenance loans were also available.

However, I’m glad I didn’t delay going because it was 2012 when tuition fees ballooned up to £9,000. Not only that, but the loan repayment period also increased to 30 years from 25.

It gets worse, though. Although there’s only been a tiny cost hike since — despite soaring inflation — the repayment period went up even further last September to 40 years.

Factor in the variable interest rate as well, which is 6.25% for me but stands as high as 7.6% for more recent plans, and it’s a surefire way to ensure the balance due keeps climbing north.

Admittedly, student loans are not like regular loans. The amount you pay is income-contingent, and if you fail to pay it back in the specified period, it gets written off and forgotten about.

No — it actually gets passed on to the taxpayer.

Nevertheless, there are numerous articles I’ve read in the last few months that paint a bleak picture of the UK university finance system.

The statistics are damning:

For undergraduate students finishing in 2023, the average debt is around £48,000.
1.8 million people owe £50,000–£100,000.
61,000+ people owe £100,00–£200,000.
The highest debt known to the Student Loans Company is more than £250,000.
Only 27%–30% of people on Plan 1 and Plan 2 loans (1998–2023) will repay them in full.
40% of universities are facing budget deficits in 2024, with several at risk of bankruptcy.

On the penultimate point, I’m fortunate to say I am in that minority now. But I appreciate the reality for many is going to be a perennial student debt that follows them their entire working lives.

Isn’t it strange that despite the declining value of the average university degree (mine certainly didn’t help me), the amount of money students are expected to cough up keeps going up and up? Obviously, it’s not helped by the cost of living crisis either, particularly for those living away from home.

I could have let my loan fester for another 15 years, but I much preferred to detach myself from the very system I disdain.

It’s also psychologically relieving to know I will never see ‘Student Loan: £*****’ ever again on my payslip.

Good riddance!

What a dysfunctional state of affairs. Thankfully, I’m not a student anymore — it only seems to be getting worse and worse.

Are you one of those old enough to remember when you got paid to go to university thanks to generous grants?