Student loans in England put 'psychological burden' on the young, says think tank

·2-min read
Student loans in England put 'psychological burden' on the young, says think tank
In a new report, graduates spoke about feelings of anxiety, pressure, worry and dread about the ever-present and growing debt hanging over them. Photo: PA

A new report has revealed the psychological stresses put on young people graduating from university, as England nears a decade following 2012 increases to tuition fees. 

The new report called Hidden Voices: Graduates’ Perspectives on the Student Loan System in England by Professor Claire Callender and Dr Ariane de Gayardon draws from interviews with 48 graduates who were subjected to the 2006 funding regime paying tuition fees of £3,000 ($4,001) per year and 50 more who were subjected to the 2012 regime, paying £9,000 annually.

The report found that, despite a working system of repayments, graduates consider tuition fees and interest rates to be too high, see the amount of debt owed as a burden and feel the repayment period is never-ending.

In the report, graduates describe emotional and psychological disturbance from their debt, with those in the post-2012 reforms cohort considerably more negative about their student loan debt.

A graduate from the 2012 funding regime cohort said of the accruing interest on their debt: "It makes you feel sick and horrible, you know: an absolutely horrible feeling inside your chest, your stomach."

People also spoke about feelings of anxiety, pressure, worry and dread about the ever-present and growing debt hanging over them. In both cohorts, the sheer size of their loan debts weighs on graduates’ minds while repayments feel never-ending, feelings which are exacerbated by the interest accruing on their loans.

Graduates, especially post-2012, also questioned the long-term financial sustainability of the current student loan system driven by a recognition that most loans will not be repaid before the write-off date. 

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They sometimes worry about potential future changes to the terms of their loans which might make their loan repayments less manageable.

According to Statista, in 2021, students graduating from English universities will have incurred an average of more than £45,000 of student loan debt, compared with £27,600 in Wales, £24,700 in Northern Ireland, and around £15,200 in Scotland.

Currently, more than £17bn is loaned to around 1.3 million students in England each year.

Earlier this year, students, unions and finance experts warned against forcing graduates to start repaying their loans earlier, saying it would hit lower earners hardest and pile pressure on the COVID generation.

Ministers were understood to be considering cutting the threshold at which graduates begin to repay their tuition and maintenance loans from just over £27,000 to £23,000.

Watch: How long does it take to pay off a student loan?

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