‘University is my biggest regret’: I earn £70,000 and it’s STILL not enough to pay down my student loan

The monetary burden of a scholar mortgage has elevated dramatically for at this time’s era of younger individuals. 

In 2012, most annual charges rose from £3,000 to £9,250. Extra not too long ago, inflation-linked curiosity has meant graduates are paying an eye-watering 7.9%.

Figures launched not too long ago by the Scholar Loans Firm present almost 2million individuals now owe between £50,000 and £100,000 in scholar mortgage debt, with one particular person owing an enormous £252,000. 

Anna*, 31, graduated from college nearly 10 years in the past and says that despite the fact that she earns £70,000, she remains to be solely paying off the curiosity on her Plan 2 mortgage. Right here she shares her expertise of feeling ‘trapped’ by the scholar mortgage system. 

Till 2022, I used to be by no means bothered an excessive amount of about my scholar mortgage. 

I hadn’t thought an excessive amount of into it as a result of, like everybody says, it is the quantity you pay not the stability.

Nevertheless, after I landed my dream job working for a big firm in London, my wage went up considerably.

I needed to transfer to the South East so my value of residing went up, in addition to my tax funds. After all, my scholar mortgage funds and curiosity additionally went up considerably.

Now I pay £4,000 per 12 months in direction of my scholar mortgage. That simply covers the curiosity, so my mortgage presently stands at £46,000.

I borrowed £37,000 initially, and I’ve already paid off £12,000, so it has accrued nearly £20,000 in 10 years.

I am 31 now, so my mortgage will not be written off till I’m 57, if my wage stays roughly the identical. That additionally does not account for taking day out of labor to have kids, if I do. 

I’ll pay round £100,000 for my enterprise diploma, which I simply do not assume it’s value.

Even when I get a pay rise to £100,000, then I will be paying £6,500 per 12 months and it nonetheless will not pay down my mortgage as a result of the curiosity is now 7.9 per cent.

In the event you’re residing close to London, it isn’t irregular to be on £70,000, and you then’ve received your hire to pay.

I do not anticipate anybody to really feel sorry for me, or for anybody on a better wage. However I can not consider that even in case you are incomes greater than £70,000, its nonetheless not sufficient to pay down your debt and you’re solely clearing the curiosity. 

You need to go to your goals, your aspirations, and really feel such as you’re getting someplace, however now I pay £2,000 in hire with my companion, and I’ve tax to pay after which my scholar mortgage is paid post-tax.

I believed by taking this job that I might actually really feel the good thing about it, however I am not that a lot better off than I used to be.

My take-home wage is just a few hundred kilos larger every month than after I was incomes round £40,000.

I’m tempted to begin paying down the mortgage with a few of my financial savings and further funds. 

I truly made a £19,000 fee, however then modified my thoughts and miraculously managed to get it again earlier than it was totally processed.

I can not predict the longer term, and the Authorities may change the principles on scholar loans at any level. What if the rule on when the loans are wiped was modified again to 30 years, and I needed I hadn’t made that fee? 

It’s a lot to gamble when you find yourself 31. I’ve by no means spent that a lot cash on something.

The Reform Occasion stated within the election marketing campaign that it might take away all curiosity from the mortgage, so that each fee would truly repay the mortgage. 

Once you hear events speaking about insurance policies like that, you assume: ‘I can not danger paying it in a single go’.

I really have no idea what to do. I really feel trapped, it’s the greatest remorse of my life and I really feel as if each success I’ve is punished.

I used to be round 18 after I took out the mortgage, I did not perceive rates of interest and the way compound curiosity works. I really feel like persons are solely simply feeling the results of this now, as a result of I used to be the primary 12 months to go to college with these £9,250 charges.

I work in gross sales, and I believe I may have gotten in to an analogous job with no need to go to college. I might quite have carried out an apprenticeship or discovered a distinct route in that would not go away me with such a big mortgage to pay.

Both I let go of £50,000 of financial savings after I’m 31 or I find yourself paying doubtlessly over £100,000 for my diploma. Within the worst case it may even value £200,000 if I used to be very profitable.

It is made me really feel like all my goals have been crushed. A big a part of my job is irritating, however I took it for the wage which I am no longer benefiting from as a result of elevated residing prices and scholar loans.

I simply cannot perceive why they’ve set it up like this. The policymakers do not have this – most of them received their levels without cost.

*Title modified 

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