Even while they are still studying


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Even while they are still studying

And as more graduates move into higher-paid jobs and so begin paying back their debt, this interest will be an increasing source of revenue for the Treasury.

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Analysis by financial adviser Hargreaves Lansdown found that students starting university this year could have more than £60,000 of debt by the time they graduate.

Even while they are still studying, interest on their debts can top £7,000.

Before 2012, graduates were charged 1.2 per cent interest on their student loans.

James Walker, founder of complaints website Resolver, said: ‘For young people already facing bills of thousands of pounds through a large chunk of their working lives, this news will add insult to injury.

‘As will the use of the RpI to calculate a disproportionately high interest rate that’s well over what older people will pay for a standard loan.

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‘Young people face enough challenges already. They shouldn’t have to bear the brunt of unfair lending practices that banks wouldn’t get away with.’

A Treasury spokesman said: ‘We believe that students should contribute to the cost of their studies with fair, income-based repayments. Higher earners contribute more, while the Government writes off any unpaid loan balance after 30 years.’


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