‘My student debt makes me stressed and angry’

Students and recent graduates face unnecessary stress and anxiety because of the size of their student debt, even though it is written off after 30 years if still unpaid. The proportion of students reporting mental health problems to their university has more than doubled in the past five years, from 1.4pc in 2012-13 to 3.5pc last year, according to a report last week from the Office for Students (OfS), the watchdog.

Research from Save the Student, an advice website, suggested that student debt and rising living costs had played a role in this increase. When current students were surveyed, 57pc said money worries had negatively affected their mental health, while 52pc were concerned about the repayments on the loan.

Several recent graduates told Telegraph Money that the sheer scale of their debt – which since the tuition fee increase in 2012 can easily top £50,000 – causes them stress, anger and a feeling of hopelessness.

Save the Student’s research also showed how poorly understood the loans were by the borrowers concerned. Half of respondents said they did not understand their loan agreement, while seven in 10 said they did not know their interest rate.

The website’s Jake Butler said: “We deal mainly with students, but do hear from a number of recent graduates and the student loan is always what they are concerned about. The main gripe people have is the size of the debt – they just see that number and think, ‘I’m never going to pay that off ’.

“That huge number can be very alarming. It’s human nature not to want to be in debt.”

‘EVERY YEAR, I RECEIVE MY STATEMENT AND PANIC’

Yama Aria, 20, who is studying law at Nottingham Trent University, said: “I don’t really understand the loan at all. I just know I’ll start paying it off when I earn £25,000. My school just said, ‘ there’s a loan and it will pay the university’ and that was it.”

He added that, despite getting a loan to cover living costs and working part-time at Nottingham Forest Football Club, he still struggled to make his money last until the end of the month.

“Most of my friends are the same. The loan comes in and everyone is happy but most of it goes immediately on accommodation,” he said.

“I don’t think I show it openly but deep down it makes me feel anxious. I look at my bank account and I think, ‘Oh God, I don’t have money for the rest of the week’.”

Others shared similar sentiments. A 25-year-old graduate who works in publishing said: “Every year I receive a student loan statement and panic.

The vast sums they owe are affecting their mental health, students tell Sam Meadows and Harriet Barber ‘That huge number can be very alarming. It’s human nature not to want to be in debt’

Students now leave university with average debts of more than

Proportion of a graduate’s salary above £25,575 taken as loan repayment

The interest means my debt increased by more than £1,500 last year to £39,068, even though I’ve been paying it back for four years.

“It makes me feel really rather stressed and angry. I understand it’s wiped out after 30 years, but it does feel like a burden looming over me and I worry about whether the rules around repayments might change.”

Another graduate, 23, who also works in publishing, said: “People from financially precarious backgrounds see the word ‘loan’ and get scared. Obviously it’s not a loan, the bailiffs aren’t going to come around. But if you don’t know that or if nobody is there to explain, that’s off-putting.”

Tom Morgan, 27, who works for a nutrition company near Brighton, said he felt apathy rather than anxiety. “The absolute enormity of the debt compared with the average graduate’s salary has just ended up creating a mass of apathy,” he said. “You can’t feel anxious when you’re feeling hopeless compared with it.”

He added: “As there is no foreseeable way of paying it all back, and it just comes out of your pay cheque each month as a tax of sorts, you just have to accept it.”

Experts said students should receive more help and details about the loan as they make life-changing financial decisions at the age of 17.

Mr Butler said: “I think schools and the Government need to do more to explain the system. People are confused about why the fees are so high when they will never pay back the loan. The Government needs to be clearer with students that most will never pay back their loan and tell them why that’s not a problem.”

Yama Aria says he doesn’t really understand the terms of his student loan

A spokesman for the Student Loans Company, which administers the scheme on the Government’s behalf, said: “To help customers understand their loan, we provide clear and straightforward information as they apply online and as part of their loan agreement.

“Once students apply for their loan, they are able to access their account online, which provides the interest rate, repayment thresholds and conditions.”

The spokesman said the company used a number of channels, including social media and YouTube, to engage with students.

The Department for Education said it could not comment because of “purdah” rules around the election.

In August it announced that the repayment threshold would increase to £26,575 from April.

HOW DOES THE LOAN WORK?

Students now leave university with average debts of more than £50,000, after the trebling of tuition fees to more than £9,000 in 2012. Students are charged the maximum interest rate, currently 5.4pc, while they are studying, despite having no means to make repayments.

However, experts said the size of the debt does not matter, and the loan could be better understood if it were framed as a tax.

Graduates make repayments of 9pc of their salary above £25,575. This means the repayments will be the same whether the worker owes £5,000 or £50,000.

Unlike a normal debt, it can never be defaulted on and will be written off entirely after 30 years. Only very high earners are likely to pay it off before then.