Parents Against Student Debt

Real Life Student Debt Stories

“I am haunted by the fact that my profoundly deaf daughter could be robbed of any quality of life as she faces a 30-year-long debt which could be sold off to debt collectors if the government sells off the student loan book. Her recent loan statement saying she owes £62,000, on top of the enormous challenge she faces in finding a job, is devastating.”  Karen, mother

“It is deeply unfair that my son faces carrying a £50,000 debt and paying an extra 9% tax for the next 30 years of his life for a qualification that I got for free. We should be investing in our children’s higher education, not turning them into cash cows to be milked for the next 30 years.” Johnny, father

“Huge sums of money are being offered to 17/18 year-old school children with little or no experience of finance, tax or interest rates, believing the myth that “you never pay it back.” No advice required, no warnings, no compulsory education beforehand. The first inkling of their true commitment only emerging when the first statement drops though the door, four years after they started university. In any other financial service this, together with the lack of information regarding the increasing debt, would be construed as mis-selling to a vulnerable age group.” Jennifer, mother

“My son is being charged £1,800 for a year out working even though he is not at uni at all, all year. The placement is nothing to do with the uni (he had to find it). He has to produce a 2,000 word essay, 25min presentation and 10,000 word journal that will be assessed next summer. Can there be any reason they are charging £1,800 for what can only be 3-4 hours work tops? Terry, mother

“Why should my son, who has epilepsy, is struggling at university, and had to take time out, face so much debt over his lifetime? He is paying high fees and an extortionate interest rate. The government must address this.” Caris, mother

Listen to PASD supporter Carmel Neale’s audio interview explaining the debt her son will face over his working life.

 

Since 2012, students have had to swallow eye-watering fee hikes and sky-high interest rates on their loans, leaving many of them with around £50,000 of debt that they will have to pay back over the next 30 years. Asking students to make some investment in their future is reasonable, but debts at these levels are already damaging lives. Moreover, this has happened while the government has made unilateral changes to the terms and conditions. IF has already published reports on: the public benefit of higher education; the unsustainability of the student loan system; the erosion of the graduate premium; the long debt-tail of student loans.

Below are key unfairnesses in the current system:

  • Current students face interest charges at above-market rates (RPI+3%)
  • From September 2017 students face a 6.1% interest rate
  • Institutions are allowed to increase fees by inflation until at least 2020
  • Loan repayments at 9% of income over £21,000 on top of 12% National Insurance and 20% Basic Rate Income Tax means a marginal 41% tax burden even for lower-earners, & that’s before 2% auto-enrolment pension contributions and high housing and living costs
  • The government has gone back on its promise to raise the repayment threshold in line with earnings, dragging more low-earners into repayment by fixing it at £21,000 for 5 years
  • Top uni pay has sky rocketed by 15% on the back of our kids’ loans
  • The government wants to sell its pre-2012 loan book to private finance, having sold the 2002-2006 loan book
  • Average uni halls accommodation now costs around £141 per week, a 5% increase in the last year alone
  • Maintenance grants to help the poorest students have been withdrawn, forcing them now to take larger means-tested maintenance loans

 

What can I do?

  • Share your story to show your support. Email mystory@if.org.uk 
  • Write to your MP to demand action to stop further fee hikes
  • Be a student-friendly voter and vote for political parties offering a fairer deal

What we’re calling for:

  • Reduce the high debt and tax burden on graduates, sharing the cost of educating our future workforce more fairly
  • Restore maintenance grants for students from poorer families to allow them to go to university
  • Stop student loans increasing in real terms by pegging interest rates to true inflation
  • Overturn the freezing of the repayment threshold. Start repayments above average earnings, once graduates actually start to benefit financially
  • Play fair with young people: guarantee the terms of borrowing and repayment, and return student loans to the protection of the Consumer Credit Act. No changes without full parliamentary approval
  • Show students value for money: make institutions open their books on how student fees are spent
  • Stop the selling-off of the loan book
  • Stop universities and/or private providers from increasing uni accommodation costs above inflation
  • Stop peddling the myth of the “graduate premium”, which promises unrealistically high salaries for graduates