1.8m students owe £50,000 to UK government

Nearly 1.8 million people now have at least £50,000 of UK student debt, according to data obtained by media outlets. More than 61,000 have balances exceeding £100,000, and another 50 individuals each owe over £200,000, figures from the Student Loans Company (SLC) reveal. The statistics were released following a Freedom of Information (FOI) request for the number of loan holders with above-average debts who are eligible to start repayments.

Previously, the SLC stated the average balance for loan holders in England at the start of repayments was under £45,000. New government data indicates this amount has now risen to £48,470. Balances can be significantly higher for those who pursue multiple or lengthy courses, often increasing rapidly due to interest.

In the 2023/24 period, approximately 2.8 million people in England made student loan repayments, according to government figures released post-FOI response. This means only a small fraction of those repaying their balances are in over £100,000 of debt, but the majority owe more than £50,000.

Earlier this year, media revealed that the highest UK student debt was over £231,000 and now it is £50,000. About three months later, this figure has increased to £252,000. Tom Allingham, from Save The Student, described such balances as “alarming” but “in no way indicative of the norm.” Personal finance expert Martin Lewis told the media the debts should be viewed more like a “limited form of graduate tax.”

Speaking on Radio 4’s Today programme, he explained: “Student finance for the vast majority of students is not about what you owe, but what you earn – you repay 9% of everything above a threshold.” For instance, those on “Plan 2 loans” would pay 9% of everything earned over £27,295. The National Union of Students (NUS) called it “ridiculous” that none of the main parties are offering “reform” of student finance in the election campaign.

Debts are written off at the end of loan terms, regardless of the amount owed at that point. The terms often span 30 or 40 years but depend on the course and start date. Heavily-indebted graduates have expressed concerns about the current system. Titi, a senior electrical engineer from Croydon who asked not to use his full name, saw his student debt, standing at more than £128,200, increase by £788.11 between April 6 and June 6 this year.

“No matter how much I pay it is always increasing,” he said, referring to the nearly 8% interest rate on accounts like his, driven by high inflation. The father-of-one, 43, told the media he feels it is impossible to repay the balance in full following his four-year course at London South Bank University and two years studying for a Higher National Diploma. “It seems like a money-making avenue when you look at the (interest) rates applied to the loans,” he said. Titi fears some people may be discouraged from higher education “when they do the calculations” and consider what they could earn without a degree.

It has been over 10 years since tuition fees were tripled in England. From 2017, fees have cost a maximum of £9,250 per year across the UK, though in Scotland, Scottish students are charged a maximum of £1,820, and in Northern Ireland, the current maximum tuition fee for full-time undergraduates is £4,710. Many people who borrowed “exceptional amounts” on “Plan 2” loans – introduced when fees were tripled – are unlikely to repay the full amount, according to Ben Waltmann from the Institute for Fiscal Studies.

Claire Callender, a professor of higher education policy and deputy director of the Centre for Global Higher Education, told the media that owing such high amounts is “likely to have a negative impact on graduates’ lives.” It is unclear whether the largest debt now known to the SLC – £252,000 – is on the same loan as the one reported as the highest in March, at £231,000. Nick Hillman, director of the Higher Education Policy Institute, told the media he was “most shocked” by the number of people with over £200,000 of student debt. He noted that fewer than 50 people owe at least £10 million between them.

“Clearly, at that level, the student loan system is not working well because these people will not pay it all back,” Hillman said. In response to the FOI request, the SLC noted that people with higher-than-average balances “may be in receipt of several student loan products,” including an Advanced Learner Loan for further education courses and funding for undergraduate, postgraduate Master’s, and postgraduate Doctoral courses. Other factors behind high student debts could include studying multiple or longer courses or holding more than one loan plan type. Some students receive additional funding due to “compelling personal reasons.”

Despite owing over £101,500, foundation year 2 doctor Abbie Tutt appreciates that the system does not impact credit scores. However, Dr. Tutt, who posted a video on social media “celebrating” her balance surpassing £100,000, is unhappy about the length of time she will be paying it off. The 27-year-old finds the debt disheartening compared to that of older colleagues who repaid their loans under more favorable terms.

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