Tackling your debts

Do you worry about your student loan debts?

Posted 23 September 2015

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Around 13 million Brits now have a student loan that they haven’t cleared, so how can it affect your other debts?

Managing several debts at once can feel like a weight on your shoulders, and it can be easy to lose track of how much money needs to be paid where each month. One debt repayment you may not have considered is your student loan … if you’re still covering the cost of your degree, you’re not alone.

According to the latest research* carried out for us, one in four people in the UK currently have a student loan that they haven’t paid off. Whilst this is the only way that the majority of people will be able to afford higher education, it’s good to think about what you want to do with your future before committing to anything. It might even be worth considering whether you actually need to go to university for your career. From our research, one in six say they regret taking out a student loan as they didn’t need a degree for the job they ended up in. A further one in seven don’t think they’ll ever pay off their student loan, so it’s really worth thinking ahead before taking one out.


The cost of student life

Student loans are different from most other types of borrowing as you don’t need to worry about repaying them until you earn over a set amount, currently £16,910. This means that for people on a lower income or for those who are out of work, student loan repayments don’t need to be an immediate worry. In fact, it seems that this is how many people with a student loan think, as two in five say they don’t worry about having one as it’s so common. Another two-fifths say they don’t regard their student loan as debt.


If you started higher education and took out your student loan after 1998, you really don’t need to worry about paying back your student loan quicker. You won’t be penalised for just paying the standard amount that’s deducted from your salary each month. What’s more, your student loan will be written off after 25 years, 30 years, or when you’re 65, depending on when you took it out. If you’re coming to the end of your repayment period, it might be worth contacting the Student Loans Company, as they may accidentally keep taking payments from you. You’ll be able to claim this back, but if you’re already trying to cover debt repayments and other expenses, you don’t want to have the hassle of being out of pocket for a few months.


When you start earning over the threshold, the payments are automatically taken out of your bank, so you will never run the risk of missing a payment. Of those who are currently repaying their student loan, the median average monthly payment is £75.50, which is a lot of money if you’re already struggling to make ends meet.

Uninformed about loans

The majority of student loan holders are pretty clued up, as three-quarters say they know exactly or approximately how much they need to repay, whilst some haven’t taken a closer look at the details of the loan. Almost half of those with a student loan admit they don’t know how much interest they’re being charged. Even more worryingly, one in nine say they didn’t even know they were being charged interest.

Whilst it may not be too worrying that some people seem to be uninformed about their student loans, it could become a problem if they start to apply this way of thinking to other types of borrowing. Not knowing how much interest you’re being charged on a loan or credit card could mean that you’ll struggle to budget for repayments, which may lead to more serious problems with your debts.

Problems with other debts

Managing problem debt is tough, and if you’re struggling to find the money to cover another repayment, you may want to look at taking more serious action. Speaking to a debt expert could be the first step to getting back in control of your finances, and they may be able to advise you about the different debt solutions available to you, such as IVAs and DROs for which some fees may be payable.

*OnePoll questioned a nationally representative sample of 2,000 adults aged 18 and over between 20th January and 27th January 2015, of whom 635 were in Scotland. Figures have been extrapolated to fit ONS 2013 population projections of 50,371,000 UK adults.

by Sarah Symons

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