'Student loan repayments are holding back my career'

A solicitor has said her student loan debt is limiting her career progression because a higher salary would increase loan repayments and leave her with less to live on.

Charlene Merry, 31, is one of more than 52,000 people who responded to a recent Treasury Committee inquiry inviting people to share their views on student finance.

Merry, who is now a senior solicitor at a law firm in Hull, said it was "really frustrating" that an increase in salary would leave her with less disposable income than she has currently.

The government said it had raised the repayment threshold recently and capped interest rates this year.

Merry told the BBC Politics North programme that the remaining balance of loans she took out for her undergraduate and postgraduate degrees, which she completed in 2018, now stands at £70,000.

Currently, she is paying back £400 a month.

She said: "I wanted to progress my career to gain more experience in a big city centre firm, but the increase in my salary would mean I'd have to pay more towards my student loan, leaving me with less disposable income than I have now."

A parliamentary inquiry is currently assessing if repayment terms for student loans in England are "reasonable".

Graduates with Plan 2 loans have been paying back 9% of everything they earn over the repayment threshold, which currently stands at an annual income of £28,470.

This threshold will remain frozen at £29,385 from 2027 to 2030, rather than rising with inflation.

In April, after the inquiry was launched, the government said interest on some student loans in England will be capped at 6% in the next academic year to protect graduates from the risk of rising inflation due to the Iran war.

Campaigners have welcomed this but called for wider reforms to the system.

Beth Smith, an events and hospitality manager in Bradford, also appeared on the programme. Smith said she was the first person in her family to go to university and said nobody sat down with her and discussed the costs before she took out he student loan.

"I didn't know anything about interest or repayments," she said.

Smith said her debt is currently around £80,000.

"The biggest thing is how it impacts career progression - If I was to go for those higher earning jobs, I've got to pay more."

Merry said she was told at the time she took out the loan that her monthly repayments would be similar to that of a mobile phone contract.

The solicitor said that in retrospect, if she had fully understood the terms of the contract and repayments, she probably wouldn't have taken out the loans.

A government spokesperson said they recognised some graduates had concerns about the cost of student loan repayments.

"We inherited the current system and have taken steps to make it fairer - including raising the repayment threshold for the first time since 2021 and capping maximum interest rates this year to protect graduates from rising costs.

"We have also reintroduced targeted maintenance grants to expand opportunities for people from all backgrounds to go to university or college."

The spokesperson said the student finance system protected lower-earning graduates, with repayments linked to income and any outstanding balances and interest written off at the end of repayment terms.

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