I threw a party when my student debt hit £100,000 – I see it as a joke

Josh Hinh always knew it would take five years of university — and as a result, roughly £80,000 of student debt — to pursue his dream career in architecture.

But Josh, who is 30, had not fully appreciated that he might never reduce his Plan 2 student loan at all, because so much is added to his balance in interest each month.

Despite paying over £100 a month towards his student debt, that amount doesn’t make a dent in the interest being added, meaning his outstanding balance has continued to grow.

Over time, he began to see the humour in it and even threw himself a party when the balance tipped over £100,000. He now owes over £110,000 – and he has abandoned all hopes of paying any off before it is eventually wiped.

“I always knew I was unlikely to pay my student debt off, because architecture isn’t the best-paid profession and you have to earn a lot to pay down your student debt,” he said.

“But it’s now at such a ridiculously high number, I can’t even take it seriously. It sounds so stupid, it might as well be in a foreign currency or Monopoly money. I just can’t even comprehend it.

“I remember the day it went over £100,000 — I threw a mini party. It was such a big threshold to hit, I had a little celebration. I honestly see it as a joke now.”

Josh, who lives with his parents in Fulham, west London, said he doesn’t feel misled about it being difficult to pay off his loan, because he knew it would cost a lot to do the five-year degree required for architecture. But he does feel angry about the Government charging interest and feels the loans should be interest-free.

Graduates with Plan 2 student loans currently have their interest rate calculated based on their earnings. If you earn under £29,385, you pay the RPI inflation rate for the previous year, currently 3.2 per cent.

For those earning between £29,386 and £52,884, you pay RPI plus a variable rate, depending on your income, up to a maximum of 3 per cent. So, the maximum you will currently pay is 6.2 per cent.

From September 2026, the Government is capping the Plan 2 and Plan 3 student loan interest rate at 6 per cent, so it won’t increase above that next year.

Recent figures from the Institute for Fiscal Studies (IFS) showed someone with a Plan 2 loan would typically need to earn £63,000 just to keep their student loan balance the same, and more than this to pay any of the actual debt off. Anyone earning less is just paying off some of the interest.

“I wasn’t naive about having to take the loan out, because that is unfortunately just the way it is in this country — although I studied in Scotland where local students were studying for free while I paid £9,000 a year, which was a bit demoralising,” Josh said.

“I do feel angry that we’ve managed to let it get this far. Not only can I not pay it all off, I can’t pay any of it off.  I don’t think the Government should be charging any interest at all.

“I don’t regret my degree because I needed it to pursue a career in architecture and at least my degree is fulfilling its intended purpose, but I do feel I didn’t fully understand what I was signing up for with the loan,” he added.

Living at home with his parents in Fulham has allowed Josh to save and spend money on travel rather than London rent, including running marathons abroad. But despite being able to put some money aside, he still does not expect to make a dent in his student loan balance.

Student debt frustration grows

Josh is one of hundreds of thousands of graduates grappling with enormous student loan debt that they can’t pay off, meaning the hundreds of pounds taken from their salaries every month just go to servicing the interest added.

Over the past few years, frustration about the high interest rates charged on the loans has grown, with thousands of graduates finding their loan balances have continued to grow long after leaving university, despite going on to earn decent salaries.

In response, the Treasury Select Committee (TSC) launched a call for evidence, which received over 52,000 responses in total.

The findings, published earlier this week, revealed that the vast majority of respondents had found the financial impact of repaying their student loan worse than they expected, while even more thought the level of interest and repayment terms were not reasonable.

Of the 49,357 respondents who have taken out loans:

• 40,373 said the financial impact of repaying their student loan was worse than expected
• 45,843 said that they think the terms are not reasonable
• 28,275 said that they did not understand the terms and conditions of their loans before they took them out
• 25,291 said they would not take their loan out again, given the choice again

Dame Meg Hillier, chair of the TSC, said: “Let me say very clearly to those who filled out our survey: the message has landed with the Committee. While not everyone has had a bad experience, the massive scale and strength of frustration and upset is powerful and, as MPs, we must listen.

“It’s imperative for the prosperity of our country that people currently in their 20s and 30s feel incentivised to work hard and build successful careers. Unfortunately, what these findings tell us is that far too many young people feel over-burdened and demoralised by their student debt.”

The TSC will now spend the next few weeks looking at the different options available to the Government before making some recommendations for change.