Graduates are emotionally and psychologically disturbed by their large student debt, a report suggests.
University graduates believe tuition fees and interest rates are too high and they see the amount of debt owed as a “burden”, according to a paper from the Higher Education Policy Institute (Hepi) think tank.
One graduate said he felt “sick” due to the accruing interest on his student debt, while another said they would probably not have gone to university if they had had to pay the fees that students now pay.
The report, which is based on interviews with around 100 English graduates, suggests that those who had to pay up to £9,000 a year in fees are considerably “more negative” about their student loan debt.
Undergraduate tuition fees for students in England were introduced in 1998 and rose to £3,000 per year in 2006, increasing further to £9,000 in 2012.
The report says: “Graduates experience some emotional and psychological disturbance – including anxiety and despair – because of the size of their student loan debts.
“They believe they will never repay their loans because the amount owed is so high.”
It adds: “These emotions are mostly experienced on receipt of their annual statement from the Student Loans Company, which can create an unpleasant cognitive shock and sense of unease, despair and anxiety at being reminded of the sums owed.”
The paper suggests that for some graduates the debt is experienced as “an ongoing burden” and a source of anxiety and stress that can negatively affect their mental health.
On the interest on their debt, one graduate from the 2012 funding regime cohort said: “It makes you feel sick and horrible, you know: an absolutely horrible feeling inside your chest, your stomach.”
Meanwhile, a graduate from the 2006 funding cohort said: “The amount that students have to pay is just ridiculous and honestly, if I had to pay the amount that students today have to pay, I probably wouldn’t have gone to uni at all.”
The research is based on interviews with 48 graduates who were subjected to the 2006 funding regime and 50 graduates subjected to the 2012 regime.
Report co-author Claire Callender, professor of higher education policy at UCL Institute of Education and Birkbeck, University of London, said: “Graduates offer a distinctive perspective on student loans.
“Their experiences may not always be easy to listen to and may be contrary to policymakers’ thinking, intentions and vision. Nonetheless, there are significant lessons for policymakers.
“While there are benefits of the 2012 funding reforms, the changes exacerbated the very features of the student loan system graduates already found problematic and increased the burden of student debt.”
Report co-author Dr Ariane de Gayardon, a researcher at the centre for higher education policy studies (CHEPS) at the University of Twente in the Netherlands, said: “Debt can take a psychological toll on graduates arising from the size and longevity of the debt, alongside the interest charged.
“All can potentially damage the lives and aspirations of future generations.
“When reforming the loan system, one objective should be to reduce the burden of student debt for graduates. To do so, we need to listen to the voices of graduates.”
After the spending review last month, the Government said it would set out further details of the higher education settlement, alongside the response to the Augar report, “in the coming weeks”.
A raft of recommendations were made in the Post-18 Education and Funding Review – an independent panel led by Philip Augar – which was published in May 2019, including cutting tuition fees to £7,500.
It also recommended that graduates should have to repay their student loans over 40 years rather than 30, and the repayment threshold should be lowered.
Currently graduates begin paying their loans back when they earn £27,295 or more a year, but ministers are thought to be considering reducing that figure.
Jo Grady, general secretary of the University and College Union (UCU), said: “This report highlights the inherent toxicity in the student loans system which punishes students for entering higher education, burdening them with decades’ worth of debt and placing a serious strain on their mental health.
“This is a mess for which successive governments must take responsibility.”
A Universities UK (UUK) spokesperson said: “It’s essential that all prospective university students have access to clear information on the student finance system before they start their applications.
“As this report highlights, students do not start paying back loans until after their studies and repayments are then based on their income.
“We know from students that their greatest concern is the cost of living while they study, and this is why UUK has long campaigned for an increase in maintenance support, targeted at students from the most disadvantaged backgrounds.”
A Department for Education spokesman said: “The student finance system was built with students’ interests in mind, so that all those with the talent and desire to attend higher education are able to do so, regardless of their background.
“Repayments depend on the borrower’s income, ensuring that loans remain affordable, whilst fairly sharing the cost of higher education between graduates and the taxpayer.
“We remain committed to driving up the quality of standards and educational excellence alongside ensuring a sustainable and flexible student finance system. We will set out further details of the Higher Education settlement and our response to Augar in due course.”