Student loan interest is escalating at an alarming rate, with graduates accruing £482 every second in the 2024-25 financial year, according to the latest figures from the Student Loan Company. This marks a significant increase from just three years prior when the interest accrued was £4.7 billion in 2021-22, rising to a staggering £15.2 billion in 2024-25.
Despite repayments totaling £5 billion last year, the rapid accumulation of interest means many graduates are struggling to reduce their overall debt. Dr Arthur Joustra, a 27-year-old NHS paediatric trainee, shared his experience: “I borrowed £55,000, have paid back around £10,000, yet now owe £72,000. Even with monthly repayments of about £250, or £3,000 annually, my debt continues to grow.” He emphasized the anxiety this creates, affecting not just doctors but graduates across the board, as their debt silently climbs despite consistent payments.
Oliver Gardner from the campaign group Rethink Repayment called the system “broken,” pointing out that despite graduates earning solid salaries and making regular repayments, their loan balances keep growing due to compounding interest. “It starts to feel less like a loan and more like a penalty for pursuing higher education,” he said.
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Gardner also highlighted systemic issues: “High interest rates combined with frozen repayment thresholds make it nearly impossible for many to reduce their debt. Additionally, student loans lack the protections offered by the Consumer Credit Act or Consumer Duty, leaving borrowers vulnerable.”
Responding to concerns, a Department for Education spokesperson noted that the current student loan system is a legacy of previous governments and is designed to protect taxpayers while supporting students. They emphasized that lower-earning graduates are shielded, with any remaining debt and interest written off after 30 years. “Graduates with higher salaries contribute more than those who did not attend university or those on lower incomes,” the spokesperson added.
As the interest on student loans continues to rise unchecked, it raises pressing questions about the fairness and sustainability of the current repayment framework and its impact on graduates’ financial futures.