The Martin Lewis Podcast Should you take a student loan? Martin’s five things you need to know about student finance
Sep 25, 2025
Dive into the complexities of student finance with insights on tuition costs and the nuances of loan repayments. Discover how parental contributions can impact students, and why current interest rates may not tell the whole story. There's also an update on energy standing charges that aims to help low users. Plus, listeners share amusing accidental savings stories. Martin emphasizes that loans might be better left for future investments like a mortgage, and he explains how different repayment plans affect graduates based on their earnings.
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Loan Size Is Not What You Repay
- Student loan headline balances (e.g. £60k) are misleading because repayments depend on earnings, not amount borrowed.
- You only start repaying the April after you leave and repay 9% above the earnings threshold.
Repayments Follow Earnings, Not Debt
- Annual repayments depend solely on earnings above the threshold, so borrowing more doesn't increase yearly payments.
- The borrowing amount only affects whether the loan clears before the wipe (30–40 years).
Interest Often Mirrors Inflation
- Interest on Plan 5 loans is set to RPI, so in real terms it often just keeps pace with inflation.
- Martin calls it 'no real cost' because you repay the same purchasing power you borrowed.