How student loan repayments work (and why clearing the debt could be a bad idea)
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Students with Plan 5 loans will be paying off more debt, and for longer.
By Samantha Partington
Student loans are necessary for many as a way to pay for tuition fees and living expenses while at university.
On average, students are now forecast to accrue up to £50,000 in debt during their time at university, according to the Institute of Fiscal Studies. The huge figure combines annual tuition fees of up to £9,250 a year, maintenance loans and loan interest charged while studying – but the debt can get far higher if you take longer courses, or more than one course.
These debts are likely to rise in future, since Labour announced tuition fees will rise for the first time in eight years from September 2025, up to £9,535 a year. Maintenance loans will also rise by £414.
While beginning your working life saddled with so much debt is not an appealing prospect, a student loan doesn’t operate like other typical loans, and repaying it early may not be in your best interests. For one thing, i...
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