UK student loan reforms place ‘psychological burden’ on young people

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In a new report, graduates spoke of feelings of anxiety, pressure, worry and dread over the ever-present and growing debt hanging over them. Photo: PA

A new report has revealed the psychological stress faced by young university graduates as England approaches a decade after tuition hikes in 2012.

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

The report found that despite a functioning repayment system, graduates view tuition fees and interest rates too high, view the amount of debt as a burden, and find the repayment period endless.

In the report, graduates describe emotional and psychological turmoil with their debt, with those in the post-2012 reform cohort being significantly more negative about their student loan debt.

A 2012 Fundraising Cohort graduate said of the interest they’ve earned on their debt, “It makes you sick and horrible, you know, absolutely horrible feeling inside your chest, your stomach. “

People also spoke of feelings of anxiety, pressure, worry and fear over the ever-present and growing debt that weighs on them. In both cohorts, the sheer amount of their loan debts weighs on the minds of graduates as repayments seem endless, feelings that are exacerbated by the interest accrued on their loans.

Graduates, especially after 2012, have also questioned the long-term financial sustainability of the current student loan system, motivated by the recognition that most loans will not be repaid until the write-off date.

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They sometimes worry about possible future changes to their loan terms that could make their loan payments less manageable.

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

Currently, over £ 17 billion is loaned out to around 1.3 million students in England each year.

Earlier this year, students, unions and financial experts warned against forcing graduates to start repaying their loans earlier, saying it would hit low-income people harder and increase pressure on the COVID generation.

Ministers were considering lowering the threshold at which graduates start repaying 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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