University students and graduates owe a massive £21.9 billion in student loans alone, new figures today reveal.
The Student Loans Company reports a 176.7% increase in tuition loans to students studying at English universities with over £1 billion lent during the academic year 2007/08 alone.
In addition, it also lent £2,835.5 million to students in the form of maintenance loans.
In 2005/06, outstanding debt to the Student Loans Company was £15.3 billion increasing to £18.1 billion in 2006/07.
Since September 2006, English domiciled students and EU students have to pay up to £3,070 in tuition fees. The majority of students currently take out a loan from the Student Loans Company, which they do not have to pay back until they have left higher education and are earning over £15,000 a year.
There are currently 2.7 million students and graduates with outstanding student loans, of which 1.7 million are making repayments. During the last year, the Student Loans Company received £633.5 million in repayments, including £194.4 million paid earlier than required.
Last week, the Student Loans Company revealed student debt in Scotland has passed the £2 billion mark, a rise of 11%.
The total amount lent to higher education students in Scotland during the financial year was £212.8 million, up 8% from the previous year.
Johnny Rich, founder of student website Push, says the current student loan scheme – whereby students pay for their study at the backend rather than upfront – is designed to widen access and encourage more people to continue with their education after school.
But he adds: “The problem is not how people repay their loan – it’s the amount they have to repay. For some, this amount of debt is prohibitive as they don’t know whether a degree is worth it. However, in most cases, a higher education is a fantastic investment.”
Students currently graduate with an average of £18,000 debt, with medics and architects normally accruing much more.
Rich adds: “It’s hard to leave university with that much debt, and means saving for a deposit on a house or investing in a pension may get put off.”