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

 

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:

  • Current students face interest charges at above-market rates (RPI+3%)
  • From September 2017 students face a 6.1% interest rate
  • Compound interest racks up monthly adding around £200 each and every month to a debt of £50,000
  • 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 an effective 41% tax burden even for lower-earners
  • 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  • Maintenance grants to help the poorest students have been withdrawn, forcing them now to take larger means-tested maintenance loans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:

  • Stop loans increasing in real terms by pegging interest rates to true inflation
  • Make loan repayments more affordable by capping at a maximum of 5% of income over £21,000
  • Play fair with young people: guarantee the terms of both borrowing and repayment, and return student loans to the protection of the Consumer Credit Act
  • 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
  • Overturn the freezing of the repayment threshold