Will you be claiming your pension before you have finished off paying your student debt?
Reports released today have suggested that students will be paying back loans from their University days into their 40s and 50s. With daily living costs on the rise this could put a lot of financial strain on families to survive and live comfortably. Since 2012 student fees have shot up to an astronomical £9,000 per year with a typical University leaver averaging debts of nearly £44,000.
The decision to bring in a real, above-inflation interest rate on student loans means that almost half (45%) of graduates will pay back more than they borrowed in real terms, is it fair? To burden future generations with crippling amounts of debt before their career has even begun!
It is also estimated that around 70% of students will have some debt written off under the new system compared with 30% under the old system. It is believed most graduates will pay less in their mid-30s than they would under the old regime, but will pay more throughout the next 20 years.
Although the new system will benefit graduates who earn very little in their lifetime, for the vast majority of successful professionals , it will mean having to find £2500 extra a year to service loans which will put a huge strain on family life.
Conor Ryan, director of research at the Sutton Trust, said: “There has been a lot said about the lower repayments that graduates make in their 20s under the new loan system, but very little about the fact that many graduates will face significant repayments through their 40s, whereas many would previously have repaid their loans by then”
What are your thoughts on this story? Do you think University fees are justified in the present day? Do you think your job prospects are good enough to warrant the risk of having a huge debt hanging over your head? Get in touch with us at [email protected] with your views.
The full news story can be found here: http://www.bbc.co.uk/news/education-26954901This entry was posted in News on .