Fears about student loan debt 'more damaging than financial reality'

By Helen Gradwell

Martin Lewis, the head of the Independent Student Finance Taskforce, has highlighted that "the psychology and fears that surround the new tuition fees are far worse and much more damaging than the financial reality."

This comes as it's revealed that (according to the Telegraph) six in ten students believe that they'll have to start repaying their loans as soon as they graduate - regardless of whether they have a job or not. Another six in ten are concerned that a student loan might damage their credit rating - but students loans don't appear on credit files.

Martin Lewis explains: "You don't have to pay it back - that's the point! It's a payment based on financial success - if you don't have financial success, you don't have to pay a penny."

He went on to add: "I hope people do have to repay a lot on their student loans, because it means that they are high earners."

The Telegraph has also put together a list of 'mythbusters' about student loans. This includes:

. Monthly payments only depend on earnings. So whether your course cost £6,000 or £9,000, your repayments will be the same.
. Student debt is written off after 30 years. Repayments stop after this time - no matter what you still owe.
. You could be throwing tens of thousands of pounds away by 'paying up front'. Some parents believe that paying up front from their savings is a more financially sensible option. In actual fact, many young people starting courses on the £9,000 tuition fees won't repay what they owe before the 30 year 'wipe'. This means that parents could be throwing big money away. The Telegraph suggests doing some research before deciding to repay early.

Tags: Martin Lewis, student loans, Independent Student Finance Taskforce

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