University is a good way to get your foot on the ladder of a future career, but what isn’t always considered is the potential long term debt that higher education can give you. In this fantastic article Archie, member of the Somerset Youth Parliament Advisory Group, looks through the promise and the costs of going to University.
We often hear that university is the obvious next step for ambitious young people in the United Kingdom, but we hear far less about the silent 9% income charge that can follow many graduates for decades. Teachers encourage it, politicians celebrate it, and parents see it as a pathway to opportunity. Yet for many of us who are still in school and beginning to consider our futures, the reality of higher education is far more complicated.
Behind the promise of career opportunities and personal development sits a financial system that many students struggle to fully understand. The UK student loan system is frequently described as manageable, or even fair. Maybe it once was. However, for those of us preparing to enter it, the numbers can be difficult to ignore.
Students graduating in 2024 entered repayment with an average debt of around £53,000, while total student loan debt across the country has reached £267 billion and continues to grow. For young people considering university today, the decision increasingly feels like both an opportunity and a financial commitment that could last for most of our working lives.
The Promise of Higher Education
There are many clear benefits to university. For some careers – including medicine, law, engineering, and scientific research – a degree is essential. Higher education can also provide opportunities to develop independence, explore new ideas, and meet people from different backgrounds.
Graduates, on average, still tend to earn more over their lifetimes than people without degrees. Universities also play a crucial role in research, innovation, and economic growth.
To support access to higher education, the government provides loans that allow students to attend university without paying tuition fees upfront. In theory, this system allows students from a wide range of financial backgrounds to study at university.
However, the long-term consequences of these loans are often less widely discussed.
The Growing Cost of a Degree
For students in England today, tuition fees are capped at £9,250 per year. Over a typical three-year course, this totals £27,750 before living costs are even considered.
Maintenance loans are designed to help cover rent, food, and other daily expenses. However, with rents rising rapidly in many university cities, these loans often fall short of the actual cost of living. As a result, many students take on additional work while studying or rely on family support if it is available.
For those who receive close to the maximum maintenance loan, total borrowing can easily exceed £50,000 by the time they graduate.
Repayments and the Reality of the System
Student loans are often described as different from conventional debt because repayments depend on income. Under the current Plan 5 system, graduates only begin repaying once they earn above £25,000 per year, and they pay 9% of their income above that threshold.
Supporters of the system argue that this makes repayments manageable, since those earning less pay less or nothing at all.
However, this also means that many graduates repay relatively small amounts each year — often less than the interest being added to their loan.
For example, someone earning £30,000 would repay around £450 per year. At the same time, interest continues to accumulate on the remaining balance.
For a significant number of borrowers, this means the loan balance can continue to grow even while they are making repayments.
When Interest Outpaces Repayments
One of the most controversial aspects of the student loan system is the role of interest.
Depending on the repayment plan, interest rates have reached as high as 7.3% in recent years, while newer plans currently charge interest roughly in line with inflation, around 3.2%.
Even at lower rates, interest can accumulate quickly on large balances.
This creates a situation where many graduates will never reduce their loan balance in any meaningful way. Instead, their repayments mainly cover the interest that has been added.
For some borrowers, particularly those on middle incomes, the amount they owe may actually increase for years after leaving university.
Estimates suggest that a large proportion of borrowers will never fully repay their loan before it is written off, simply because interest grows faster than they are able to pay it down.
In practical terms, this means that for many people the loan behaves less like something that will eventually disappear, and more like a long-term graduate tax that lasts for decades.
A Forty-Year Commitment
Under the newest system, student loans are written off 40 years after repayments begin.
For someone graduating in their early twenties, this means repayments could continue until they are in their early sixties.
For graduates who never earn extremely high salaries, the loan may simply remain in place throughout most of their working lives before eventually being cancelled.
While this structure prevents people from facing unaffordable payments, it also means that many graduates will carry the psychological weight of a growing debt for decades, even if they know it may never be fully repaid.
The Uncertainty Facing Today’s Students
Financial concerns are only one part of the decision. The future job market itself is becoming increasingly uncertain.
Competition for graduate jobs has intensified, with many entry-level roles receiving hundreds more applications than they did a decade ago. At the same time, technological developments such as artificial intelligence are beginning to reshape industries and the types of skills employers demand.
For young people deciding whether to commit to university and the debt that comes with it, the traditional promise, that working hard and getting a degree will guarantee opportunity, feels less certain than it once did.
Looking Ahead
University still offers enormous opportunities. It can open doors to careers, broaden perspectives, and provide experiences that shape people’s lives.
But the financial realities of the student loan system are an unavoidable part of that decision. For many students, particularly those without family financial support, taking out large loans is not really a choice, it is simply the only way to access higher education.
Understanding how the system actually works is therefore crucial. The reality is that many graduates will spend decades making repayments, while their loan balance may never truly shrink.
Recognising these realities does not mean rejecting higher education entirely. But it does mean acknowledging that the system funding it raises serious questions about fairness, opportunity, and the long-term financial pressures facing the next generation.
Credit: Student loan statistics – House of Commons Library
Archie
Not just elected members
Did you know that Somerset Youth Parliament isn’t just it’s elected members? Any young person in Somerset aged 10-25 years can become a member of the Somerset Youth Parliament Advisory Group.
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