I am forever grateful for my education and understand the need to pay for it. However, the conversation around the impact of student loans is sorely lacking, and I hope to spark a meaningful dialogue on this critical issue.
My current student loan debt hovers around £70,000 and keeps growing each year. Realistically, I’ll never be able to pay it off. The specific amount, however, isn’t the main issue, it’s the fact that I’ll be paying a 9% of my salary for the next 24 years, until I reach the age of 55.
Student loans were introduced in 1998 under a Labour Government, starting at £1,000 per year. This figure rose to £3,000 a year in 2005 and then, controversially, to £9,000 in 2012 under the Conservative-Liberal Democrat coalition. Today, it stands at £9,250 a year. As a result, students in the UK are now burdened with more debt than those in any other OECD country. While these are government-backed loans that many people won’t fully repay, the financial strain of making monthly payments is very real.
A prospective teacher will typically borrow for three years of undergraduate study plus an additional year to complete their PGCE, which remains the most popular route. This initial borrowing amounts to £27,750. However, with the abolition of student loan maintenance grants, many students now borrow an additional £9,250 per year to cover living costs. As a result, a teacher can start their career with a staggering £55,000 in student loan debt.
As I mentioned earlier, the total value is not the primary issue; rather, it’s the continuous payments over the following 30 years that are concerning. While this involves a lot of numbers, it’s necessary to illustrate my point.
If you left your PGCE last year, you will be placed on the Plan 2 repayment scheme for payment to the SLC. The starting wage for a teacher is £30,000, which means you will repay around £20 per month. However, once you have been teaching for 5 years, this raises to £105 per month and eventually, without TLRs etc, your wage will be £46,525 and you will repay £150 per month of your student loan and, at this rate, you will never pay it off. This means you will pay £1,800 per year for the next 30 years.
For some, this doesn’t look like too much money but when compared to those who have been teaching for some time and took out their student loans prior to 2012, the divide is stark.
If you took out your student loan in 2011, they would have paid a total of £12,000 in student loans. For some not eligible for the maintenance grant this may be more, but the average amount borrowed from UK Government statistics, the average student loan was £16,000. Many of these pre-2011 graduates will be at the top of the pay scale and will be coming to the end of their time with the SLC.
Pre-2012 borrowers have a total lifetime repayment of around £20,000 on average and will most likely finish paying this off in their early to mid-30s, with wage deductions lasting about 10 years. In contrast, those who started university in 2012 or later will be repaying their student loans for 20 years longer and will pay almost £30,000 more in total!
What is more important is to look at what this means in a teachers pay packets over the course of their career. Both pre and post-2012 teachers could now be at the top of their pay scales but one will take home £1800 more per year than the other and will continue to do so until they are over 50 years old. Having a reduction in your wage of £150 a month for an additional 15 years is £27,000. This is £27,000 less during their entire career just because they went to university, in some cases, just one year later.
It is about to get much worse. Aspiring teachers who begin their undergraduate degrees soon will be entering the Plan 5 student loan repayment scheme, just for context, it was Plan 2 in 2015, and we are already up to Plan 5. Under this new plan, they will start repaying their loans earlier, face higher interest rates, and their debt won’t be forgiven for 40 years. This can lead to the strange case where they will be paying student loans but not National Insurance.
At a starting salary of £30,000 per year, they will initially pay £26 a month, but this amount will escalate to £160 per month and persist until they are at least 61 years old. Over the course of their career, this means they will take home £45,000 less compared to someone who graduated in 2011. This stark disparity highlights the unnecessary financial burden placed on new graduates.
I am passionate about my frustration with repaying my student loans every month, not because I believe I shouldn’t contribute, but due to the inherent unfairness based solely on when one was born and decided to attend university. For many who obtained their degrees after 2012, an additional £150 per month could significantly ease the process of saving for their first home, for example.
But there is also the profound impact this has during a cost of living crisis. Teachers who find themselves taking home less money every month due to an their student loans are significantly disadvantaged to their pre-2012 colleagues. This discrepancy means that younger teachers, or those with fewer years of service, are financially worse off compared to their more experienced colleagues, despite performing the exact same roles and responsibilities.
In an era marked by soaring energy bills, skyrocketing rent prices, and increasing travel costs, the financial strain becomes even more pronounced. The burden of these essential expenses is magnified for those who earn less, leaving them struggling to make ends meet. This systemic failure, characterised by a repayment structure that has been overhauled three times in the past decade, has created unnecessary hardship for newer teachers.
The average age of a teacher in the UK is 39 years old, so I realise that I am potentially in the minority in my view of this as a teacher, but as the years continue, more and more teachers take home less every month because of their student loan. This impact of having £1000s less in your career to spend on yourself is significant and the problem will only get worse as pay rises continue and student loan thresholds remain frozen.
Teachers shouldn’t be paying back their student loans. Providing student loan forgiveness for professionals in high-demand fields such as those found the UK Government Immigration Salary List, could incentivise more people to pursue a career in jobs such as teaching. By alleviating the financial burden of student loans, these teachers are more likely to stay in their roles longer, addressing the shortage more effectively. Moreover, this would enhance the attractiveness of these positions among recent graduates, fostering a more sustainable school workforce.
We need fairness across the years because when all teachers are paying their student loans off for their entire career, the argument will fade and discussions will falter. We should be talking about what to do with student loan repayments taking away from younger people, not just in education but in all professions.
inquestion. 