If You Go On Maternity Leave With A Student Loan, Prepare To Be Screwed By The Interest

Sabina Kadic-Mackenzie and her husband did the same degree – at different costs.

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Sabina Kadic-Mackenzie and her husband, Stuart, did the same degree, at the same university, and both graduated in 2006. Stuart has almost paid off his student loan, while Sabina is “nowhere near” repaying the debt – after 14 years of payments.

The reason? The couple have two children and while loan repayments were paused during Sabina’s maternity leave, the interest continued to pile on – cancelling out years of payments she’d already made.

“A man and a woman with identical degrees, for which I will pay significantly more. Where’s the fairness in that?” she tweeted in a thread, after calling the Student Loans Company and discovering her outstanding balance.

Sabina Kadic-Mackenzie and her husband, Stuart.
Sabina Kadic-Mackenzie
Sabina Kadic-Mackenzie and her husband, Stuart.

Sabina and Stuart, now based in Edinburgh, both studied Journalism at Stirling University in Scotland. They weren’t eligible for free fees, as they were residents in England at the time of taking out their loans. Sabina says her first response to discovering her loan balance was shock.

“My husband is a feminist, so we’re both dismayed that the system penalises women in this way,” she tells HuffPost UK. “If nothing else, we are raising two daughters who will one day face this issue unless it’s addressed.”

Sabina believes the system is “unfair”, especially when you consider women tend to earn less than men and make up a significant proportion of the part-time workforce. “This means they earn less than their male counterparts and are paying less of their loan before the interest during maternity leave is even taken into account,” she says.

This issue has been raised before. Unison, a public service union in the UK, stated during the 2019 National Women’s Conference: “The only fair way to deal with this (apart from the complete repeal of student loans) is to freeze the student loan and interest accrual for the young woman going on maternity leave, until such time as she returns to work.”

Sam Smethers, chief executive at women’s right’s charity Fawcett, says Sabina’s experience is “yet another example” of a system designed by men for men, and a consequence of the “unequal impact of caring roles resulting in a lifetime of income inequality for women”.

Sabina, Stuart and their two children.
Sabina Kadic-Mackenzie
Sabina, Stuart and their two children.

A spokesperson from the Women’s Equality Party (WEP) agrees, telling HuffPost UK: “The government should take action on this unjust situation where women are penalised for having children as interest piles up on their student loans, especially given that take-up of shared parental leave and paternity leave in the UK are so low.

“We cannot hope to change this whilst men are still more likely to be the higher earners in heterosexual couples and they only receive statutory paternity pay, leaving new parents without a real choice.”

The WEP says a positive step would be for the government to pause interest on student loans during parental leave, although “this would not be enough to really tackle the current situation which discriminates against women”.

Sabina agrees a pause on interest is needed – as is better education around student loans to start with. “Since I shared my story on social media, I’ve been encouraged by the number of men who are equally outraged,” she says.

“The most common response though, from men and women, is surprise that this is even the case. Young people are taking out these loans, which they will be repaying for the majority of their adult working life, without truly knowing the facts about how much it will cost them.”

“The only fair way to deal with this is to freeze the student loan and interest accrual.”

- 2019 National Women’s Conference

The most frustrating response, says Sabina, has been from people – “mostly men, it has to be said” – who argue that it doesn’t matter, because the debt will be written off eventually. “This completely misses the point about the difference in consequences for those taking maternity leave after the birth of a child,” she adds.

When asked about maternity policies, a spokesperson from the Student Loans Company told HuffPost UK: “SLC is responsible for the administration of student funding and repayment policy as directed and agreed by the UK Government and the devolved administrations in Scotland, Northern Ireland and Wales.”

The issue has already been raised with the Scottish parliament and an answer is expected on September 7, 2020.

A spokesperson from the Department for Education, said: “We want everyone with the talent and ambition to access higher education, which is why student loans are available to all students regardless of background, financial history or life stages.

“Unlike commercial loans, student loans carry significant protections for borrowers as monthly repayments are linked to income, not to interest or the amount borrowed, and any outstanding balance is written off at the end of the loan term. Individuals only make their contribution to the system when they are earning over the relevant repayment threshold.”