The Student Loan Trap

In Escape Everything! ten years ago, I said that student loans (that is: privately-arranged loans to be paid back with interest over the course of a working life) are a trap and should be illegal.

I stand by that. To me, it is a component of a system of indentured servitude in which you must work to pay off an unnecessary debt concocted for someone else’s financial gain.

They hit you while you’re young, before you know better, when you’re vulnerable or desperate and looking for a good start. Their power and presence prevent you from seeing any alternative. They get you on Day One.

The student loans system also ties education formally and systemically to work: get a degree, get a job. Never mind curiosity or self-improvement or the furthering of human capacity. Get thee to the grind and shut your face.

When I wrote that book, student loans were something in the region of £25k. My own student debt after graduating in 2004 was about £6k. Even though it was evil, a student loan was a trap you’d conceivably escape.

Today, the Guardian reports that:

Helen Lambert borrowed £57,000 to go to university and began repaying her student loan in 2021 after starting work as an NHS nurse.

Since then she has repaid more than £5,000, typically having about £145 a month taken from her pay packet. But everything she hands over is dwarfed by the £400-plus of interest that is added to her debt every month, thanks to rates that have been as high as 8%.

Her total outstanding debt had ballooned to more than £77,000 by the end of November, and it is set to get a lot bigger as there are another 25 years left of the 30-year repayment period.

The amounts of money we’re talking about here are staggering. How badly do we (as a society) want kids to want to be nurses? What are you going to make them crawl through?

It is classic Trap technology. Make them pay (twice!) for what they want after creating a system to fully control what they want in first place. Most people can’t see beyond the work/earn system: we lack an adequate vantage point and most people really think they want to work, to the extent that you can charge them for it. With interest. For thirty years.

In other words: unless you’re an impossibly high earner, you’re in a pitcher plant.

Luckily, there’s a solution of sorts. Don’t try to pay the loan back. Unpaid student debts are cancelled after 30 years.

Save the Student, a student money website, says that unlike most other types of debt, “it’s not always the best idea to make extra repayments … It’s unlikely you’ll repay your loan in full before it is cancelled, so making the extra repayments just means you’ll be paying back more than you need to in the long run”.

There’s no moral reason to pay back this sort of loan. It shouldn’t have been lent to you in the first place. Your creditor is a large, servitude-enforcing corporation. They won’t be hurt by your failure to pay them back. And, anyway, if you can hurt them you probably should. They’re evil.

Unfortunately, if you’re successful in getting a job, you’ll have to pay some of the loan back because a sum will be deducted automatically from your pay. Even though the loan was privately arranged, the government slurp it out of your earnings as a tax-like deduction. Refusing to work, of course, is a good way to avoid that. But that’s rather a shame when you specifically set out to become a nurse.

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Escape traps like an un-pro. New Escapologist Issue 18 is available now.