Student owes £30k more than he borrowed and rising
Matthew BrownA graduate who says he owes £30,000 more than he borrowed to go to university says the system is hitting people from working class and middle-income backgrounds hardest.
Marketing specialist Matthew Brown, 29, from Gosforth in Newcastle, has undergraduate and masters degrees from Hull University.
He said it is "really frustrating" to see his student loan debt rise from £62,000 to £93,000 since 2019 despite his repayments.
The government said the system protects lower-earning graduates as repayments were linked to income, but the founder of the campaign group Rethink Repayment said graduates were being used as "cash cows".
Under the Plan 2 version of student loans, which operated from 2012 to 2023, graduates currently pay 9% of their income above £29,385, with interest charged at the rate of the Retail Prices Index (RPI) plus up to 3% depending on their salary.
'Stuck in a trap'
Brown, who took Italian studies as an undergraduate before completing a masters in advertising and marketing, submitted written evidence to a Treasury Select Committee inquiry into the student loan system.
He said: "If you're not earning enough you'll be OK, it just sits there.
"If you're earning quite a lot or you come from a family where they can maybe afford to pay off your loan, you're not affected by that at all.
"But there's this middle ground where you've maybe come from a working class family like myself, you've had to take out a bigger loan and you're getting promotions [at work]."
With some students complaining that, in certain circumstances, above-inflation interest charges will see them paying back more than the sum of the original loan in real terms, Brown said: "You get stuck in this trap where I may even pay back more than I initially borrowed which I think is totally unfair."
Rethink Repayment is calling for a cap on student loan interest rates, lower rates of repayment and a higher threshold on earnings before repayments start.
Founder Oliver Gardner said: "Some people are seeing hundreds of pounds a month going out in their student loan repayments and that's money that they can't put towards saving to start a family and have children or save into their pension for retirement."
A government spokesperson said it recognised some graduates "have concerns" about the cost of student loan repayments
They said the government had taken steps including "raising the repayment threshold for the first time since 2021 and capping maximum interest rates this year".
