A 30-year-old doctor says rising UK student loan interest rates have pushed his debt up by more than £25,000, leaving him fearing he may never fully repay what he borrowed. Dr Jack Tagg, who took out £55,000 in loans to fund his medical degree, now owes around £80,000 — largely due to interest accumulated both during and after his studies.
Dr Tagg, originally from Yorkshire, began a five-year course at Cardiff University at the age of 18. Like many school leavers, he saw university as a pathway to professional advancement. While he knew tuition fees had risen from £3,000 to £9,000 per year in England, he said he was unprepared for how quickly interest would compound.
Before even completing his degree, he had accrued £14,000 in interest. Now eligible for interest rates of up to 6.2% on his loan from Student Finance England, he estimates that in the current tax year alone his debt has increased by £3,000 — despite making repayments.
He believes the structure of the system is having a “huge impact on the wellbeing” of graduates, particularly those in professions like medicine where salaries rise gradually over time.
How UK Student Loan Interest Rates Are Calculated
Student loans across the UK begin accruing interest immediately after they are paid out. For students in England who started university in 2023 or later, interest is typically set at the Retail Price Index (RPI) measure of inflation, currently 4.3%.
Those who began their studies between September 2012 and July 2023 face interest rates ranging from 3.2% to 6.2%, depending on earnings. Graduates earning under £28,470 pay at the lower end of the scale, while those earning £51,245 or more pay the maximum rate.
In Wales, rates also vary between 3.2% and 6.2% depending on income, while Scotland and Northern Ireland apply a rate of 4.3%.
Repayments are automatically deducted from wages once earnings exceed national thresholds. In England, graduates generally repay 9% of income above £25,000. In Wales the threshold is £28,470, and in Scotland it stands at £32,745.
Economic Pressure and Policy Debate
In November, UK Chancellor Rachel Reeves described the interest system as “fair and reasonable” following criticism over the freezing of repayment thresholds in England. Under the policy, the threshold will be set at £29,385 from April 2027, meaning more graduates could begin repayments sooner or repay larger portions of their income.
In contrast, Wales’ First Minister Eluned Morgan has ruled out freezing repayment thresholds for Welsh graduates.
While loans are written off after a set period — typically 30 years in England, with write-off periods ranging from 25 to 40 years across the UK depending on the plan — many borrowers will continue making payments for decades without fully clearing the principal.
Dr Tagg argues that although medicine is often perceived as a high-earning career, financial stability can take years to achieve. During that time, interest continues to accumulate. He worries the mounting debt burden could deter prospective students from entering vital professions.
Student Voices: Debt Anxiety and Social Divides
Concerns extend beyond medical graduates. Libbie Thomas, a 20-year-old law student from Bridgend county in her second year, estimates her debt already exceeds £30,000. She says conversations about debt have become more frequent among peers, with some even labelling university attendance as a financial “failure.”
Her classmate Robbie Wells, also 20, noted that while he has some family support, many graduates are unlikely ever to repay their loans in full. “The system itself is just not working for anyone at the minute,” he said.
Marcie Niland-Sinyard, 19, who studies social sciences at Cardiff University, said media reports about interest rates have increased uncertainty about her financial future. Coming from a low-income background and receiving maximum student finance support, she remains unsure how much she will ultimately repay.
The Welsh government maintains that it offers the most generous student maintenance package in the UK, with high levels of non-repayable grant support for students most in need. A spokesperson confirmed that views are being sought on the long-term sustainability of tertiary education funding in Wales.
Political parties across Wales have voiced differing perspectives. Welsh Conservatives education spokesperson Natasha Asghar warned that rising education costs create additional barriers amid limited apprenticeship opportunities. Welsh Liberal Democrats leader Jane Dodds described higher education as a public good that benefits the wider economy. Plaid Cymru’s education spokesperson Cefin Campbell called for a system-wide rethink, while Wales Green Party Deputy Leader Phil Davies advocated abolishing tuition fees and forgiving existing loans.
A UK government spokesperson reiterated that it inherited the current student loan system but remains committed to widening access to higher education. The government highlighted its reintroduction of targeted maintenance grants and broader measures aimed at supporting young people, including housing development, childcare expansion and rail fare freezes.
The Evolution of UK Tuition Fees
Tuition fees in England rose significantly in 2012, increasing from £3,000 to a maximum of £9,000 per year following reforms introduced under the coalition government. The changes were intended to shift more of the cost of higher education onto graduates rather than taxpayers. Since then, debates over fairness, intergenerational equity and long-term fiscal sustainability have intensified.
The introduction of income-contingent repayment plans and eventual loan write-offs means many graduates functionally pay what some economists describe as a “graduate tax.” However, critics argue that high interest rates and threshold freezes undermine confidence in the system.
With rising living costs, stagnant wage growth in some sectors, and inflation-linked interest calculations, pressure is mounting for reform. As the debate continues, graduates like Dr Tagg say the long-term psychological and financial burden of debt cannot be ignored.