A clear jar of copper pennies spills out onto a white cabinet
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The true price of student debt

By Helena Geddes

Are student loans a blessing or a burden? Helena Geddes explains why she chooses to take out the maximum student loan.

Going to university is undeniably expensive and is often considered an opportunity only available to the most privileged in society. Rent in Glasgow is currently at an all-time high and students who want to stay close to the university campus in the leafy West End have to pay inflated prices. On top of rent, there’s bills to pay, nights out to be had, coffees to get you through all-nighters in the library, and a buzzing food scene to eat away at whatever money is left. The University of Glasgow website recommends an annual expenditure of £12,580 for a single student (including rent); though I expect the cost is much higher than this. The current minimum wage for most freshers aged between 18 to 20 is just £6.56 per hour, meaning that students would need to work at least 36 hours per week just to meet the minimum annual expenditure. If university is really this expensive, then surely it is unaffordable for most prospective students? 

Well, not all heroes wear capes: some are called the Student Awards Agency Scotland (SAAS). Although my tuition fees were paid, I chose to take out the maximum loan for living costs throughout the four years of my undergraduate. Without this monthly cash injection, there’s no way I would have made it through my degree. I’ve always had a part-time job, but thanks to SAAS I was able to work minimal hours and focus most of my attention on my studies. Student loan payments not only helped my grades, but they also opened up further opportunities. As tempting as it was to spend the infamous September double SAAS payment on clothes that, let’s face it, I didn’t really need it anyway, I always made an effort to save it – I would then use the money to pay for festivals or holidays the following summer. Loan payments also continued throughout my semester spent on Erasmus, and without them I wouldn’t have managed to consume my body weight in Belgian beer or fries! Learning is one of the most important parts of university, but it’s equally important to have fun and seize the opportunities that come your way. 

“I’ve always had a part-time job, but thanks to SAAS I was able to work minimal hours and focus most of my attention on my studies.”

Deciding whether or not to take out a student loan is still a big decision for most of us, and rightly so. According to Statista, students graduating from Scottish universities leave with an average debt of £15,200. The figure is three times as high for English students, with the average debt sitting at £45,000. Starting your professional career in astronomical student debt is a daunting thought and leaves a lot of students in understandable turmoil. Despite the negative connotations, student loans are actually considered a “good” debt and are a solid investment for your future. 

There is a common misconception that the more money borrowed, the higher the monthly repayments will be. Student loans don’t actually work like this and are repaid based on how much you earn, as opposed to how much you owe. In Scotland, the current repayment threshold is £25,000. This means that you won’t need to pay anything back until you are earning over this amount. What’s more, you only repay 9% on the income you earn over this threshold. If, for example, you are earning £27,500 per year, the student loan repayment is 9% of the £2,500 earned over the threshold. This would equate to a monthly repayment of £18.75. Most phone contracts are in excess of £40 per month, but a student loan is clearly a more solid investment! A lot of people, especially older relatives, would tell me “you’re going to be paying that debt off for the rest of your life!”. Thankfully, this is not the case. If the loan has not been repaid in 30 years, then the Student Loan Company will wipe it. With such low monthly repayments, it is likely that the majority of graduates will never fully repay their student loans, unless earning significantly above £25,000.

All in all, taking out a student loan is nothing to be frightened about and opens up many doors, especially for those who might be concerned about the financial implications of going to university.


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