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Graduates reveal the financial and psychological burden of student loan debt: ‘It makes you feel sick and horrible’ 

  • 25 November 2021

In a new report from the Higher Education Policy Institute (HEPI) and the Centre for Global Higher Education (CGHE), graduates in England explain their views on the student loan system, praising its income-contingent and repayment features but criticising the high fees and large debts.

Hidden Voices: Graduates’ Perspectives on the Student Loan System in England (HEPI Report 145) by Professor Claire Callender and Dr Ariane de Gayardon is based on interviews with 48 graduates who were subjected to the 2006 funding regime paying tuition fees of £3,000 and 50 more who were subjected to the 2012 regime, paying £9,000.

Professor Claire Callender, Professor of Higher Education Policy at UCL Institute of Education, Professor of Higher Education Studies at Birkbeck, University of London and Deputy Director of CGHE, who co-authored the report, said:

Our findings suggest it is important to listen to graduates’ different views and integrate them in debates on the future of higher education funding in England. Graduates offer a distinctive perspective on student loans. Their experiences may not always be easy to listen to and may be contrary to policymakers’ thinking, intentions and vision.

Nonetheless, there are significant lessons for policymakers. While there are benefits of the 2012 funding reforms, the changes exacerbated the very features of the student loan system graduates already found problematic and increased the burden of student debt. The views of graduates are vital for building evidence-based, sustainable and fair funding policies in the future.

Dr Ariane de Gayardon, a researcher at the Center for Higher Education Policy Studies (CHEPS) at the University of Twente in the Netherlands, who co-authored the report, said:

Debt can take a psychological toll on graduates arising from the size and longevity of the debt, alongside the interest charged. All can potentially damage the lives and aspirations of future generations. When reforming the loan system, one objective should be to reduce the burden of student debt for graduates. To do so, we need to listen to the voices of graduates. Our new report provides important insights into what graduates feel about the English student loan system and which features work for them, and which do not.

The main findings of the report include:

  • Graduates think income-contingent student loans offer access to higher education and regard the repayment system as manageable, withthe income repayment threshold protecting against low earnings. Monthly repayments are seen as affordable and automatic repayments are valued.
  • However, graduates consider tuition fees and interest rates to be too high, see the amount of debt owed as a burden and feel the repayment period is never-ending.
  • Graduates describe emotional and psychological disturbance from their debt, with graduates in the post-2012 reforms cohort considerably more negative about their student loan debt.

Since the 1990s, England’s higher education funding system has been reformed many times, leading to a system based on high fees and loans. Undergraduate tuition fees for full-time students were introduced in 1998, and rose to £3,000 per annum in 2006, increasing further to £9,000 in 2012. The 2012 reforms enabled the lifting of the cap on student numbers but increased the burden of student debt.

The report includes comments from graduates about the loan system:

  • According to one graduate from the 2006 funding regime cohort, ‘The amount that students have to pay is just ridiculous and honestly, if I had to pay the amount that students today have to pay, I probably wouldn’t have gone to uni at all’.
  • A graduate from the 2012 funding regime cohort said ofthe accruing interest on their debt: ‘It makes you feel sick and horrible, you know: an absolutely horrible feeling inside your chest, your stomach’. 

Although the report focuses on England, the lessons are also likely to resonate in Wales, where high fees are also in place; in Northern Ireland, where the funding regime resembles the previous regime in England; in Scotland, where higher education funding remains contentious; and in other countries with income-contingent loans or which are interested in reforming their systems.

Notes for Editors 

  1. The Higher Education Policy Institute (HEPI) was established in 2002 to shape the higher education policy debate through evidence. It is a UK-wide, independent and non-partisan. It is funded by organisations and universities that wish to see a vibrant higher education debate. For further information see
  2. The Centre for Global Higher Education (CGHE) is an international research centre focused on higher education and its future development. CGHE is a research partnership of 10 UK and international universities, funded by the Economic and Social Research Council, with support from Office for Students and Research England. Its 10 research projects integrate local, national and global perspectives, and its researchers are based in nine countries across five continents: Europe, Asia, Africa, Australia and North America.For further information see
  3. Claire Callender (BSc, PhD) is Professor of Higher Education Policy at the UCL Institute of Education and Professor of Higher Education Studies at Birkbeck, University of London. She is Deputy Director of the Centre for Global Higher Education.
  4. Ariane de Gayardon (PhD) is a researcher at the Center for Higher Education Policy Studies (CHEPS) at the University of Twente in the Netherlands. Prior to her appointment at CHEPS, Ariane was Senior Research Associate at the CGHE. She holds a PhD in higher education from Boston College, where she worked at the Center for International Higher Education (CIHE).

1 comment

  1. albert wright says:

    I found the full report very interesting and it has affected the way I now think about the loans, particularly the student comments on how they view the interest payments.

    I was also surprised to learn that the amount of interest calculated as owing, is not paid off until the full amount of the loan has been repaid. As a result, fewer than 20% of students will actually pay the interest.

    Given the emotional response of students in the survey towards interest payments, it is a pity that all this anxiety is misplaced, unnecessary and avoidable. If the facts about the non payment of the interest for the vast majority was better understood, there would be much relief and less anger.

    I look forward to future reports on this subject.

    One final point – there is a fourth way that the burden of student loans might be reduced. If Universities were prevented by law or OFS rules from using the loan funds they receive to subsidise research, Universities would need less to deliver their services to students.

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