Student finance in England is a government funded loan to help you complete your studies. They pay for the university fees and you can obtain a maintenance loan based on yours and your parents income. There are other loans to help but aren’t relevant to the question.

There are 2 plans within this loan for when you graduate. Plan 1 is that you don’t repay until you earn over £21,000 a year and plan 2 (my plan) you don’t pay anything until you earn over £25,000.

My loan has started at £46,683 and I have had a statement come through to say it is now at £48,203. I am still under the threshold of paying it back as they would not deem my salary enough to live and pay it.

THE QUESTION:

So if the government sets these plans and these earning scales to avoid creating issues where people can’t live as they’re paying too much is it unfair to charge interest? I would pay back small amounts if I could but I literally am not allowed.

Once over the threshold I believe it’s fair to charge interest as it would encourage the person to make more payments if possible within their salary.

But to charge interest on something that I cannot control seems absurd to me.

Side note: I am using my information as a discussion point as it’s interesting to seee the actual numbers and interest charged.