Jesse-Phoenix is in their third year at a London university. They haven’t graduated yet, but their student loan balance is already £65,874.49.
Their mum Katie graduated in 2011 on Plan 1. Before Jesse-Phoenix left for university, Katie told them not to worry too much about the amount – that repayments come out as a small figure each month, that it’s manageable. What she didn’t factor in was how much the interest had changed since she graduated fifteen years ago.
Katie still owes over £35,000. She graduated with £45k.
This is the reality of the student loan system right now. And it’s worth understanding before you – or someone you love – signs up for it.
What you actually borrow (and what you actually pay back)
The standard line is that student loans aren’t like other debt. You only repay 9% of income above the threshold, and anything left is wiped after 40 years on Plan 5. That’s true. What gets talked about less is what happens in the years before the wipe.
As Katie puts it: “When you start on the lower end of the pay scales, but over the repayment thresholds, the payments don’t even touch the interest let alone the balance. Which is disheartening.”
For Jesse-Phoenix, studying in London means higher living costs, a higher maintenance loan, and ultimately more to repay. “The wealthy can go to university practically debt free,” they told us, “while others like me will barely scrape the interest added to our loans and may possibly pay back more than we borrowed.”
Jesse-Phoenix needed a part-time job to cover the gap between their maintenance loan and their actual living costs. It took them 18 months to find one. They were in their third year by the time they did.
The job market they’re graduating into
Jesse-Phoenix studies Art Direction and Visual Effects. They describe the graduate job market as “bleak” – and their creative peers agree.
“You’ll have several thousand people applying for one role and you’ll be lucky to even get a rejection email.”
The root cause, in their view, is AI – not in a vague, theoretical sense, but in a very practical one.
“We’ll most likely see a decline in junior positions with the rise of AI to keep the cost of production down. So, have I wasted 3 years on a degree for a field I may never get into? Possibly. Am I going to fight tooth and nail to get into the industry? Absolutely.”
Katie – who has friends working in film and theatre – sees it from the outside too. “Scripts written using AI, concept art for characters and costumes made using AI. The quality and humanity in the arts is being squashed by AI.”
The entry-level roles most at risk are exactly the ones graduates are competing for. The pipeline is narrowing at both ends.
What does £65k of debt actually do to your future?
Here’s what gets missed in the “it’s not really debt” conversation: student loan repayments come out of your take-home pay. Mortgage lenders look at your take-home pay to work out what you can borrow. So yes – it matters.
“Everyone says that your student loan isn’t taken into consideration when looking to purchase a home,” says Jesse-Phoenix, “but in reality, it is. You may not be able to borrow as much as someone who doesn’t have a loan.”
And then there’s the pension question. “I might not even be able to save a private pension, depending on how much I earn in the future, because I’ll be paying my student loan until I’m 63.”
They’re 21.
What they’d both tell you now
Jesse-Phoenix is clear: “Please really think about this decision. Do it because you want to, not because school wants you to.”
Katie’s advice is more practical – research other routes, look at apprenticeships, and start the money conversation early. “Show them how you do it. You don’t need to give your figures, make them up – but show your methods to stay on track. It’s a life skill which needs to be taught more.”
Both of them would tell you the system isn’t working the way it was sold.
This is hard for anyone – no wonder the government is looking to reform.