I’ve Just Cleared My Student Loan

It feels good to be in the minority, but why do we have such an unforgiving system?

I have some celebratory news blended in with a rant…

Yesterday, 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.