Tips from Money Expert Liz Hunter on Paying Off Student Loans and Busting Common Myths

As students bid farewell to their university days and step into the world of work, the reality of paying off student loans begins to sink in. The burden of student debt can be overwhelming for many new graduates, but there are ways to make the repayment process easier. Money Expert’s Liz Hunter shares some valuable tips to help graduates navigate the world of student loans and bust common myths surrounding them.

Recent data reveals that nearly 1.8 million individuals in the UK are currently in at least £50,000 of student debt, with the average balance for loan holders in England starting repayments at less than £45,000. However, this amount has now risen to £48,470, causing concern among borrowers about the feasibility of paying off their loans.

One common misconception about student loans is that borrowers will be stuck in a never-ending cycle of repayment. Liz Hunter clarifies that unlike standard loans, student loan debt is wiped after 30 years or when the borrower turns 65, whichever comes first. Additionally, repayments are based on income, meaning those earning below £25,000 may not have to make any payments until their income increases.

While student loans may not impact credit scores, they can affect eligibility for mortgages based on affordability assessments. However, there are ways to improve affordability, such as saving for a larger deposit or reducing other monthly expenses. For those considering a career in teaching, becoming a secondary school teacher in certain subjects can lead to loan repayment refunds.

One of the major concerns surrounding student loans is the rising interest rates, which can lead to significant increases in total repayment amounts over time. Liz Hunter advocates for reducing or eliminating interest rates on student loans to alleviate the financial burden on borrowers.

Despite the challenges posed by student loans, Liz emphasizes the importance of taking them seriously and exploring options for repayment that align with individual financial goals. Whether it’s paying off the debt early or utilizing extra funds for other purposes, borrowers are encouraged to make informed decisions about their student loan repayment strategies.

As the debate around student loans continues, it’s essential for borrowers to stay informed and seek advice from financial experts like Liz Hunter to navigate the complexities of student loan repayment. If you have a student loan story to share, reach out to niamh.kirk@reachplc.com to contribute to the ongoing conversation about student debt.