‘Basically you’re trapped’: UK postgraduates burdened with double loan debt

UK postgraduates carrying both undergraduate and master’s debt face a repayment system that campaigners describe as a trap, with lower earnings thresholds and higher interest rates combining to push balances upward even as graduates make regular payments. Francesca Peters finished her biochemistry degree with more than £60,000 in student debt. A master’s loan to enter her chosen field pushed the total to £77,000 [1]. “It just feels like a life tax,” she said [1]. Peters, 27, completed a master’s in bioinformatics at Cranfield University, a specialist postgraduate institution founded in 1946 as the College of Aeronautics [2]. She walked into a stable pharmaceutical data role, yet four years after graduating she had repaid £3,067 while £3,186 in interest was added to her balance [1]. “They’ve designed the system so that, basically, you’re trapped,” she said [1]. The latest Student Loans Company figures show total owed in England jumped 10.5% to £294.6bn in the 2025-26 financial year. Of the extra £28bn, just over £12bn was accrued interest [1]. Postgraduate lending rose 8.7% to £800m last year, and roughly £8bn of the near £300bn outstanding relates to master’s degrees [1]. Oliver Gardner, founder of the campaign group Rethink Repayment, called the postgraduate loan terms “some of the most egregious out there” [1]. Repayments begin at a £21,000 annual threshold, compared with £29,385 for plan 2 loans. Above the threshold, graduates pay 6% of earnings on the postgraduate loan and 9% on a plan 2 loan [1]. Interest accrues at the retail prices index plus 3%, currently 6.2% but capped at 6% from September [1]. Gardner noted the repayment threshold has been frozen since 2016 [1]. Mariella James, 22, took a master’s in sustainability and management at the University of Bath. She now has £60 deducted monthly for the master’s loan and £15 for her undergraduate debt, with the total owed reaching £60,500 [1]. “Because it’s something that I knew I needed to do to get the career I’m in, I wouldn’t have changed doing the master’s,” she said [1]. James added that she felt like the “odd one out” because most peers had their fees paid upfront by parents [1]. Gardner said the financial burden is “holding them back, particularly if you’re in a job that isn’t paying you huge sums of money” [1]. Rethink Repayment wants the repayment threshold to track wages, interest capped at inflation, and the plan 2 repayment rate lowered to 5% [1]. Peters argued the postgraduate debt should be interest-free: “We want to repay these loans … but if they’re charging these outrageous interest rates, then you’re just fighting an endless battle” [1]. A Department for Education spokesperson said the government had raised the plan 2 repayment threshold for the first time since 2021 and capped maximum interest rates for plan 2 and postgraduate loans this year. The spokesperson added that graduates, especially those with postgraduate degrees, generally benefit from higher earnings and that repaying loans is fair relative to workers who did not attend university [1].