Huge and burdensome. No, not my landlady, nor my final year workload: my student debt. Well, that’s one reality of it anyway. Living in London with the maximum student loan over my three year course is going to leave me with over £24,000 to pay back after I graduate next June. Yes, huge and burdensome indeed!
But is the financial side of our debt the only reality we need to take into account? What have I really gained from university to justify such a massive receipt? What is in my shopping trolley as I approach the prestigious checkout of university!?
More than a couple of tins of baked beans and myriad memories of hangovers I hope…
University is not just about the degree itself. Yes of course that’s where over £3,000 a year goes to fund our studies, but where does the rest of the money go and what do we get out of it? I think to only look at the financial debt we incur as a result of university completely overlooks the personal gains it offers us.
It is the nature of a debt that we owe something back. Of course we’ve got a debt in financial terms, but university also offers us incredible opportunities we might not have had otherwise. Personally, I’ve moved over 250 miles from a coastal town to the capital of the country, had the chance to live on my own earlier than I would have otherwise, discovered new music scenes, met incredible people and got to study a subject I love for three years.
The point is that I think we should all recognise the amazing opportunities university offers to us on a personal level. Like I said, to be in debt is to owe something back, but I’m not all too sure I am in debt when I consider everything I’ve come to gain from my experience.
Now, there’s no denying that £24,000 is a LOT of money and please don’t think I’m trying to tell you to ignore it. But even if we look purely at the financial side of things, I think there are a few key things all students should know about their debt before they start losing sleep over it:
1) Repayments on student loans are only made when you’re earning over £15,000. Earn any less and you don’t need to start paying back any of your pennies at all.
2) Even when you’re earning over £15,000, you pay back 9% of any income OVER the threshold. That means if you’re earning £16,000, your first fifteen grand is safe and you only repay your loan from the extra £1,000. That’s just £90 a month on a loan that can be tens of thousands of pounds in size.
3) Interest on the loan is tied to inflation. What this means is even though the size of your loan goes up in amount, is doesn’t go up in real terms. If a banker gave you this rate on any other loan his manager would shoot him.
There are a lot of other things everyone should know about their loan and I suggest that you look on http://www.direct.gov.uk/en/EducationAndLearning/index.htm to make you’re familiar with the facts. But even if you look at your debt in financial terms, it’s not something to get too worried about.
We should all take our student debt completely seriously. No, it’s not nice to have to pay back so much and yes, it is going to take a long time to give it all back. However, never forget all of the amazing experiences you’ve had or will have because of the opportunity to attend university. It’s in a place you may spend the rest of your life, it’s with friends you’ll always remain close to and you’ll gain invaluable life skills. Oh yeah and we get a degree too…
Just always try to remember everything you’ve gained from university whenever you’re lamenting over your loan or are daunted by your debts.
No, the reality of student debt might not be too bad after all.