For many graduates, taking out a student loan was once viewed as a prudent investment in their future career prospects. However, a growing number of professionals now find themselves trapped in a cycle of escalating debt, with soaring inflation rates rendering their loans seemingly impossible to repay.
The Medical Professional's Financial Burden
Arthur Joustra, a 27-year-old paediatric trainee doctor working within the National Health Service, exemplifies this troubling trend. When he initially borrowed approximately £65,000 to fund his medical studies, he anticipated comfortably repaying the investment through his subsequent earnings as a doctor.
By April 2024, his debt had ballooned to £70,177.83. Despite making repayments exceeding £3,000 in the following year, he concluded the period with an even higher balance of £72,320.58. Mr Joustra now asserts there is a "zero per cent" likelihood of ever clearing this debt unless he secures additional income outside his demanding medical role.
A System That 'Locks' Graduates In
"I think there is zero per cent chance I will ever pay the debt back if I don't earn money outside of medicine, which is unlikely because it's a full-time, stressful job," Mr Joustra explained. "The interest is never-ending."
He anticipates that only upon becoming a consultant and earning over £70,000 will he potentially begin to repay more than the annual interest accrual. His situation reflects a broader crisis where millions of UK graduates report that debt growth, fueled by high inflation, is dramatically outpacing wage increases.
How Student Loan Repayments Work
Under the current framework, graduates with Plan Two loans—those who studied between 2012 and 2023—repay 9% of their income above a £28,470 threshold through automatic salary deductions. These loans are typically written off after 30 years but begin accruing interest immediately upon disbursement.
The interest rate is pegged to the Retail Price Index (RPI) measure of inflation, with an additional surcharge of up to three percentage points based on earnings. Graduates earning £51,245 or more face the full three per cent addition on top of RPI.
Broader Economic and Personal Consequences
Data analysis reveals a significant shift: before Plan Two graduates started repaying in 2016, the total student debt cleared annually always exceeded new borrowing. Since 2016, this trend has reversed, with interest accrued now triple the amount repaid in recent tax years.
The financial strain extends beyond simple debt management. Mr Joustra noted that the structure actively discourages him from taking on extra shifts, as the net gain after income tax and student loan deductions renders additional work scarcely worthwhile. He claims this sentiment is widespread among medical professionals.
"I'm happy to repay the loan—it has given me a phenomenal career and a great job," he stated. "But everyone who took out a plan two loan has a complete lock on them."
Mortgage Dreams Dashed by Student Debt
The impact permeates major life decisions, particularly home ownership. Jo Lisney, a 27-year-old English literature graduate, finds herself unable to secure a mortgage in her native South West England despite offering a £60,000 deposit on a £240,000 property.
Her declared student loan reduces her affordability assessment by £30,000 each time, with multiple mortgage brokers insisting she needs a larger deposit despite her above-average UK earnings.
"I knew when I went to university I would take on this debt, but I didn't realise it was going to be crazy amounts of money," Ms Lisney lamented. She feels "punished" for being single, as her loan singularly obstructs her path to homeownership in her desired area.
Calls for Systemic Reform
Oliver Gardner, 26, founder of the 'Rethink Repayment' campaign, is urging the government to reduce the repayment rate from nine to five per cent. He argues the current system is stifling ambition and economic productivity for an entire generation.
"Young people are telling us they won't take promotions because they don't see any point," Mr Gardner reported. "They don't feel that they are rewarded for being ambitious—what's that going to do to the UK economy?"
His campaign highlights both the emotional toll on individuals and what he describes as a compelling economic argument for overhauling the repayment structure.
Government Response and Future Outlook
Pressure is mounting on policymakers following Chancellor Rachel Reeves' decision to freeze the student debt repayment threshold in the November Budget. The National Union of Students has warned that a prolonged freeze could leave new graduates struggling to afford basic necessities like rent, food, and utility bills.
In response, a Department for Education spokesperson defended the government's approach as making "tough but fair" decisions. The spokesperson acknowledged the system was designed by the previous administration but stated reforms are underway to create a fairer deal for future students, including the reintroduction of targeted maintenance grants.
"We're making the tough but fair decisions needed to protect taxpayers and students," the spokesperson said. "Lower-earning graduates will continue to be protected, with any outstanding loan and interest written off at the end of the loan term."
Nevertheless, for current graduates like Arthur Joustra and Jo Lisney, the promise of eventual debt forgiveness offers little solace amidst present financial constraints and deferred life aspirations.
