What is the impact of repaying income-contingent student loan debt on graduates’ lives? Lessons from England

Faced with higher education (HE) expansion and limited public funding, governments worldwide use student loans to shift costs onto graduates. Income-contingent loans (ICLs) are considered a potential solution, protecting debtors from excessive loan repayments, financial hardship, and default. Governments adopting ICLs promote them as benign while encouraging indebtedness and normalising it. Yet, policymakers and researchers largely ignore the realities for graduates of repaying ICL debt. Very little is known about the actual consequences of ICL debt for graduates. This paper explores the impact of ICL debt on graduates’ lives, drawing on 47 in-depth qualitative interviews with English graduates 10–12 years after graduation. Our findings reveal a continuum of experiences: while most graduates experience little to no impact, a significant minority of graduates face adverse effects, restricting their life choices. For these graduates, contrary to policy rationalities, ICLs’ protective features fail. We argue that this failure arise in part because ICLs seek to alleviate the financial burden of debt but not its psychological burden. Student loan policies globally need to recognise the potential negative impact of student debt and seek to better protect vulnerable graduates from both the financial and psychological burden of debt.