Most young people are told to study hard, go to a good university and snag a job they couldn’t possibly get without a degree.
To cover tuition fees, school children are told to take out a loan they do not understand and sign into a deal that can see them pay tens of thousands of pounds in interest – and not to worry about it.
But it’s now been revealed that nearly three million graduates owe more than £50,000 – and most will be straddled with an extra 9 per cent income tax for at least 30 years, when most loans are written off.
Many, such as Daveed Roodner, have told of their worries.
The psychology graduate told the Daily Mail: ‘I’ve just accepted that I’m never paying it off – until it wipes when I’m 50. I just can’t see a world where I end up paying it off with the interest that’s on it.
‘I know that if I try and get a mortgage soon it will affect that and it’s just hanging over me.’
Daveed, 25, owes more than £55,000 in student loans but only borrowed £45,000 after graduating in 2021.
He has a full-time job in consultancy and accrued £1,697 in interest last year. His repayments only amounted to £144 in the same time.
Daveed Roodner, 25, has now accepted he will never pay off the student loan he took out when he was 18
Mr Roodner studied psychology at the University of Exeter and felt he would not be able to pay off the debt before it is written off, as all ‘Plan 2’ student loans do, in 30 years.
Four-fifths of those who went to university are seeing their student loan debt rise due to high interest rates, a freedom of information request revealed.
Some 79 per cent of people who took out student loans, nearly 5.4 million, are seeing their total balance increase after graduating- even if they are making regular repayments.
In 2020/2021, however, only 66 per cent of graduates saw their balance rise rather than fall. More than two million additional graduates in 2025 are seeing their balance rise compared with 2021.
One unlucky graduate owes the Student Loans Company (SLC) £314,356, more than the average house price in the UK.
Finlay Healy, 23, who went to the University of Warwick said he borrowed £49,000 after also studying for a Masters degree.
He now owes £63,953 and accrued £2,407 in interest last year. He paid just £152 towards it last year, despite working full-time.
Mr Healy said: ‘It’s annoying because the people whose parents could afford to stump up the upfront cost of university will end up paying less because they won’t accrue any interest.
Finlay Healy, 23, who went to the University of Warwick said he borrowed £49,000 after also studying for a Masters degree
‘And those on super high salaries will pay off their loan really quickly and not pay nearly as much in interest as someone earning the average salary – like me.
‘I feel like I’m now being penalised for not being rich enough to afford the fees up front, but also for having a job that is just above the national average too – so I earn enough to make repayments but not enough to avoid a huge lump of interest being added.
‘It feels a bit like a trap.’
High inflation in the past five years has driven up the interest rate at which student loans are charged.
In 2020/2021, students on a ‘Plan 2’ loan, the most common kind, would pay a maximum of 5.6 per cent interest on their loans, dependent on income.
But in 2024/2025, the maximum interest rate a graduate could pay shot up to 7.3 per cent.
When the maximum interest rate dropped in 2021/2022 to 4.5 per cent, the percentage of graduates with rising student loan balances reduced to 62 per cent.
Clare Walsh, 26, has always earned below the salary threshold and so has not yet begun repaying her loan. But she still accrued £1,598 of interest last year, bringing her total debt to £52,569.
‘I’d never even really thought about it because you are told not to worry about it in school,’ Clare said.
‘But now that I’ve finished a Masters and got a full-time job and saw that it had grown by nearly £1,600, I just thought – how will I ever pay that off?’
Chancellor Rachel Reeves said the salary threshold at which Plan 2 student loans must be paid back would be frozen for three years after it rises to £29,385 in April
JP McGrath, who studied at the University of Sussex, now owes a staggering £89,900, despite only borrowing £62,000.
Last year, he paid £120 towards his loan. The interest added was £6,000.
But he remained positive about his experience at university. He said: ‘Honestly, it gave me the best years of my life. That amount seems high, but I would do it all over again. 100 per cent.’
New data now shows that 2.8 million graduates owe more than £50,000.
This month, a cross-party group of MPs launched an official inquiry into ‘unfair’ student loan conditions.
The Commons Treasury Committee said it will investigate whether ‘goalposts’ have been ‘moved in a way which is unfair to graduates‘.
Chancellor Rachel Reeves said the salary threshold at which Plan 2 student loans must be paid back would be frozen for three years after it rises to £29,385 in April.
The announcement, in her November Budget, will mean more graduates will be dragged into repayments than if the threshold rose in line with inflation.
The move was branded ‘not moral’ by campaigners, who said the Government was treating student debt like a revenue-raising tax.
Graduates on Plan 2 loans, taken out between 2012 and 2023, say interest is accruing faster than they can pay it off.
Interest under Plan 2 is charged at RPI plus up to 3 per cent.
The salary threshold for those on a ‘Plan 2’ loan is currently £28,470, rising to £29,385 in April.
‘Plan 2’ student loans are any loans taken in England and Wales for students who started between 2012 and 2022 – the majority of people who have student loans are on Plan 2.
Repayments are made automatically by PAYE, usually at 9 per cent of income over the threshold.
A Government spokesman said: ‘We inherited the student loans system, including Plan 2, which was devised by the previous Government. Threshold freezes have been introduced to protect taxpayers and students now, alongside future generations of learners and workers.
‘The student finance system protects lower-earning graduates, with repayments determined by incomes and outstanding loans and interest being cancelled at the end of repayment terms.
‘Since we were elected, we have been committed to supporting the aspiration of anyone who can and wants to attend higher education, including by reintroducing targeted maintenance grants to support the Prime Minister’s target of two-thirds of young people taking a gold standard apprenticeship, higher training or heading to university by the age of 25.’
