Michaela Johns, director and education sector specialist at Chandler’s Ford-based HWB Chartered Accountants, said mortgage lenders consider student loan repayments as part of their affordability calculations.
This means graduates could find they are able to borrow less when buying their first home.
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Ms Johns said: “The key point is that student loans are not ‘free money.’
“Understanding how interest works and how repayments affect future goals, such as buying a home, is an important part of long-term financial planning.
“Student loans are taken into account when applying for a mortgage.
“While they do not appear on a credit report, lenders include the monthly repayment when assessing affordability.
“This can reduce how much a first-time buyer is able to borrow, even early in their career when earnings are not high, but above the student loan repayment threshold.”
She encouraged young people to consider alternative funding options and to seek independent financial advice before committing to a student loan.
Ms Johns also pointed out that commercial borrowing might be cheaper in some cases if repayments are manageable, though student loans do offer certain protections.
She said: “Going to university and buying your first house are two of the most important things facing young people and if an unwise decision is made it can have ramifications for years.
“The high cost of student loans and associated debt may also act as a major deterrent in discouraging some young people from attending university, particularly for those from disadvantaged backgrounds, which may well lead to future skills shortages.”
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Government data shows almost £21 billion is loaned annually to around 1.5 million higher education students in England.
Total outstanding student loan debt reached £267 billion by the end of March 2025 and is projected to hit £500 billion by the late 2040s.
Graduates who finished their studies in 2024 had an average debt of £53,000 when they first became liable for repayment in April 2025.
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