Martin Lewis tells students to rip up ‘worryingly misleading and dangerous’ loan statements


MONEY guru Martin Lewis is telling students to rip up loan statements as they’re “worryingly misleading and dangerous”.

The founder of consumer website MoneySavingExpert and the Russell Group of universities are piloting a redesign of the student loan statement as the language of the current one has “disastrous consequences”.

Martin Lewis
Martin Lewis is telling students to rip up student loan statements as they’re “worryingly misleading and dangerous”

At the moment, students simply receive a statement of their outstanding “debt” and the interest that is being added.

It doesn’t mention the fact that graduates who are earning less than £25,000 per year won’t have to make any repayments, or that if they remained on this income until the “debt” wipes, they wouldn’t have to pay anything at all.

The new statement by Martin and the Russell Group focuses on the actual repayments that students have made, and what they’re likely to repay in future until the loan is paid off or written off.

Martin Lewis said: “The student loan statement is misleading and dangerous.

“For most university leavers, their outstanding ‘debt’ is one of the least important figures, yet the statement only lists this and the interest added, panicking many into poor decisions that cost some £1,000s.

“In practice, university leavers repay nine per cent of everything earned above £25,000 for 30 years, unless they clear the debt before that. So whether you owe £10,000, £50,000 or £3 million, if you earn £30,000, you repay £450 a year.”

Graduates only have to start paying back their student loans once they earn at least £25,000 per year

“The excessive focus on the language of ‘debt’ both inures young people to other, more dangerous borrowing and can mis-prioritise their finances,” Martin added.

“One woman told me her fear of the growing interest on her statement meant she used an inheritance to overpay thousands.

“Yet she was in a low-earning profession, with little likelihood of clearing much of the debt so she had effectively flushed her inheritance down the loo.

“If we are going to tell our youth that they’re in debt, we must also educate them on what that actually means.”

Meanwhile, Sarah Stevens, head of policy at the Russell Group, said: “The language of ‘loans’ and ‘debt’ can be misleading and difficult for students and their families to navigate.

“Because of the income-contingent features of the student finance system, tuition fee and maintenance loans do not resemble normal, commercial loans.

“Yet the way information on student finances is presented masks this: the current statement does not mention the Government’s pledge to cover any amount that a graduate’s salary does not enable them to repay.

“Changing the mechanics of how information is communicated should help ensure that student debt is properly understood and avoid disadvantaged young people being wrongly put off university because they assume they cannot afford it.”

In his latest MoneySavingExpert newsletter, Martin Lewis revealed whether you should buy holiday money now or wait until after Brexit.

Earlier this year, he also shared his best “comping” tips as one mum wins £75,000.

And he told Brits how you can save thousands of your mortgage.


We pay for your stories! Do you have a story for The Sun Online Money team? Email us at


Please enter your comment!
Please enter your name here