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Will We Ever Repay Our Student Loans?

13/03/2014 17:08 GMT | Updated 13/05/2014 10:59 BST

The vice chancellor of the University of Exeter announced in a debate last week that "tuition fees may have to rise again." He said that his priority was to improve the University's standards, but his words came under fire from Toni Pearce, NUS leader, who reminded those present of the fact that the government is underestimating the amount of student debt that would never be repaid.

If tuition fees were to become higher, placing students in even bigger debt, one must therefore ask the question: will we ever pay back our student loans?

It is debatable whether all graduates will reach the criteria required to begin paying back their loan at all. The current rules indicate that repayments begin when a graduate is earning £25,000 - and even then, the payments are only £30 a month.

Many graduates return home after completing their degree, and there is no guarantee as to how long it may take them to be earning the minimum required to begin repaying their loans. Considering that the starting salary for the average graduate is between £18,000 and £24,000 - and such employment is usually only found after around six months - it could be a long time before the majority of graduates begin to repay their loans.

The subject students study will also affect their ability to repay loans - there is a large difference between starting salaries for students depending on their degree. For example, medicine students will, on average, begin on around £29,000, whilst an english student will start on around £18,000.

The amount students will earn will also depend on the economy at the time - if it takes a turn for the worse in the future, salaries could be lowered, meaning that repayments would temporarily stop - causing the amount of time graduates are in debt to increase.

In December of last year, the Higher Education Funding Council England circulated an open letter to all UK universities, announcing massive cuts to student funding. National Scholarship Programmes are due to receive a £100 million cut, and there will be a £1,000 loss in the minimum overall value of student bursaries. This means that students relying on extra financial support would struggle even more with being able to afford a degree.

The privatisation of student loans means that, by 2015, money borrowed from the government will flow to private financial institutions, causing the risk of much higher repayment costs and times. The rise in interest rates and the disappearance of the 30-year cap on loan repayments mean that graduates could be in debt until they retire. This move could deter students from applying to University, making the motive of increasing tuition fees to improve standards useless.

The only solution to this web of financial difficulty would appear to be undertaking a part-time degree - debt can be avoided, and a degree can still be obtained. However, this would mean that such students would no longer be able to participate in the complete "student experience" package.

It therefore appears that students have one of two options - sign up for a part time degree and graduate (if you're careful with your money) in pocket, or prepare to be in debt for a very long time.