Students to pay back loans into their 50s

Most students may still be paying back their university loans up into their 50s, according to research.

A study carried out by researchers at the Institute for Fiscal Studies (IFS) has found that almost three quarters of graduates from England will have at least some of their loan written off under the new student loan system.

Sutton Trust, who commissioned the study, said that the 2012 student finance regime would leave people vulnerable at a time when family costs are at a high level.

It is suggested that students will now leave university with “much higher debts than before”.

Oladoyin Olorunfemi, a WBS postgraduate student, told the Boar: “I think students who have taken a £9,000 tuition fee loan would have difficulty paying it off if they don’t get a job with a high salary.”

Ms Olorunfemi, who graduated from the University of Essex in 2013, paid lower tuition fees of around £3,400. She added: “Who wants to be paying their loan off at the age of 50? You still have to consider paying a mortgage, having a family and a car.”

Laura Critchley, a second-year History student, said: ” I feel that because the system of repayment has been set up so that the loans are paid back gradually, as a small fraction of my wages, it shouldn’t be too much of an issue.

“I would much rather be paying back smaller amounts over a longer period of time than have to pay it in larger instalments more quickly.”

The study said: “We estimate that students will leave university with nearly £20,000 more debt, on average, in 2014 prices (£44,035 under the new system compared with £24,754 under the old system).

“The vast majority of this increase is the result of higher fee loans to cover higher tuition fees.”

The researches estimate that in cash terms graduates will repay £66,897 on average, which is equal to £35,446 in 2014 prices.