Student loan myths… debunked!


24th Nov 2017



The newspapers and social media are full of myths and misconceptions about student loans. And with many horror stories published recently about students racking up huge debts, it’s no surprise that many people are afraid of taking out a student loan.

But there’s no need to panic! While a student loan is still a serious financial commitment, this shouldn’t put you off achieving your goals. There are plenty of rules in place that make it safer and easier to access higher education.

Want to learn more? Here are the most common student loan myths…debunked!


“A student loan will leave me with tens of thousands of pounds in debt!”

At first glance, the figures you see bouncing around in the media regarding student debts may seem intimidating. However, as Money Saving Expert’s Martin Lewis says, “In essence that fear is misplaced. That’s because the price tag of university is mostly irrelevant. What matters in practical terms is how much you have to repay – and that’s a completely separate number from the total amount of tuition fees, maintenance loan and interest, because it all depends on what you would pay.”


“I’ll have to pay off huge amounts after I graduate!”

A student loan is unique from any other loan that you might take out. This is because your monthly repayments will be based on your income, not how much you borrowed.

For undergraduate student loans, you’ll only pay back 9% of any income above £25,000. And for postgraduate student loans, you’ll only pay back 6% of any income above £21,000. This means that if your income drops below these thresholds, your repayments will stop. Similarly, if your income never reaches these levels, you’ll never repay a single penny.

There is also no charge for graduates who wish to repay their tuition fee loans early.


“I’ll be paying off my student loan forever!”

Don’t worry, you won’t still be paying off your student loan when you’re blowing out the candles on your 90th birthday cake. All outstanding balances will be written off after 30 years.


“My credit score will be negatively affected!”

No, it won’t.  Expert Martin Lewis states that “Student loans DO NOT go on credit files.” and “Many worry about the “huge debt” putting lenders off, actually that isn’t a problem. Student loans don’t appear on your credit file, so the impact isn’t really about whether you’ll be allowed a mortgage or not.

Where it does impact is in the affordability checks which establish whether you can afford to make repayments on a mortgage. Of course, as you have lower take-home income with a student loan, that means you’ll be assessed as being able to make smaller repayments.”


“Student loans are for 18-year-olds, I’m too old to get one!”

Even if your twenties seem like a distant memory, nothing should hold you back from improving your education. That’s why there’s no age limit for an undergraduate student loan. Postgraduate loans are similarly generous, only requiring you to be under 60 on the first day of the first academic year of your course.


Still intrigued? Visit our student loans page  for more information.