- Published
When Lizzy, Libby and Charlotte met as freshers in 2012, their main responsibility was making it to lectures on time after early morning sports practice.
asserted
responsibility → publish → practice
Their student debt, growing with interest from the day they took out their loans, was the last thing on their minds.
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they → grow → minds
"The conversation was just so much less relevant at that time," says Charlotte.
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Charlotte → say → time
"As our careers have gone on and our paths have diverged more and more... those conversations start to come more to the forefront."
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conversations → go → forefront
The friends, now in their early 30s, went to the University of Newcastle in the same year tuition fees tripled to £9,000 a year in England and Wales, and new loans called Plan 2 were introduced.
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loans → go → England
Each borrowed about £37,500 to cover three years of tuition and living costs.
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Each → borrow → tuition
This year marks a decade since the first students in their year started repaying.
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students → mark → year
They may have started out in the same position, but over that time their career trajectories, life choices and earnings have shaped how much they've repaid, how much interest they've racked up, and how much they owe - with very different outcomes.
uncertain
they → start → outcomes
Student loans have come under scrutiny this year and there's been a particular backlash over Plan 2 loans.
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loans → come → loans
The government has said it wants to make the whole system fairer and campaigners are waiting to see what, if anything, changes in this month's Budget.
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campaigners → say → Budget
The anger about Plan 2 grew after the government announced updated terms in November.
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government → grow → November
The income at which graduates start repaying is set to be frozen for three years, meaning graduates would start making payments sooner and pay more each month.
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graduates → start → more
But it has also been brewing because the interest rate is higher than most other student loan plans, and many have seen their debts rise despite making monthly repayments.
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debts → brew → repayments
"Since April this year, I've paid off in the region of £450 and I've accrued over £500 in interest," says Charlotte, a physiotherapist in Bristol.
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Charlotte → pay → Bristol
She did a master's degree after uni and worked in the NHS before moving to the private sector.
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She → do → sector
She earns about £50,000, but her loan is still going up.
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loan → earn → 50,000
"It makes me angry... it's just disheartening."
All three friends earn above the national average of £39,039.
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friends → make → 39,039
But research from the Institute for Fiscal Studies, external in February suggests Plan 2 graduates need to earn about £63,000 or more for a loan balance of £50,000 to start going down.
uncertain
balance → suggest → 50,000
"I just had no concept that the debt was going to go up," says Libby, who remembers being in tears when her first student loan letter came through after graduating.
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letter → have → tears
Now a project manager in a housing association and living in Worcester, she earns £72,000 and says her student loan balance has hovered at about £47,000 for a number of years.
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balance → live → years
But she is currently on maternity leave and knows the interest will continue to accrue while her earnings - and therefore monthly repayments - drop.
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earnings → know → leave
"It feels like I will never pay it off, so it's something that I'm kind of just sucking up until the loan is written off," she says.
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she → feel → that
Her partner did the same course, starting a year before her and before tuition fees near tripled with the introduction of Plan 2 loans.
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fees → do → loans
She says it is "so frustrating" that she has to pay out thousands of pounds a year more on her student debt.
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she → say → debt
Current and former students have different student loan plans depending on where they live in the UK and when they went to university.
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they → have → university
Plan 2 loans were given out in England for a little more than a decade from 2012 and are still issued in Wales.
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loans → give → Wales
The debt is written off after 30 years.
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debt → write → years
Lizzy, who studied economics and now works in financial services and lives in Bristol, is the highest paid of the friends, who bonded over rowing at university.
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who → study → university
She earns £85,000 a year and decided last year to clear her student debt by borrowing money from her family instead.
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She → earn → family
She had estimated that, based on her current earnings trajectory, she would repay her loan in 11 years.
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she → estimate → years
By paying off her debt in full early she has accrued less interest and hopes to repay her family in four years - saving about £20,000.
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she → pay → 20,000
The amount graduates are voluntarily repaying towards their student loans has been growing.
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graduates → repay → loans
MoneySavingExpert.com founder Martin Lewis has warned that only higher earners could benefit from making voluntary repayments and most should not be "panicked into overpaying".
uncertain
most → warn → repayments
Finance journalist Holly Mead told the BBC it could make sense for those who are confident they will clear the debt and can make "a really significant overpayment" of tens of thousands of pounds, like Lizzy.
uncertain
they → tell → Lizzy
But smaller voluntary repayments could mean "you're just voluntarily paying more interest that you don't need to pay", she added.
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she → mean → that
Lizzy says she knows there are many "scenarios in which it doesn't pay off" for people to repay it early.
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people → say → it
"I made a gamble on my future self to actually repay it," she says.
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she → make → it
"I'm in a very privileged position to be able to do that...
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I → do → that
Buying your way out of the system or not being in at all is in itself a luxury.
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being → buy → itself
It buys you freedom."
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It → buy → freedom
…and 18 more, not listed.
The Aporia
