Students owe £100bn

Still think it’s good idea to let taxpayer shoulder their loan debt, Mr Corbyn?

STUDENT loan debt in the UK has soared to more than £100billion for the first time, as rising tuition fees take their toll.

Figures from the Student Loans Company show outstanding debt on loans has rocketed by almost 17 per cent in a single year.

Yesterday experts said the total is set to double to £200billion in six years and already dwarfs the nation’s credit card debt.

It comes after Jeremy Corbyn made a bid to win over young voters by pledging in his election manifesto to scrap tuition fees for new and current students.

He also told NME magazine he wanted to ‘reduce’ and ‘ameliorate’ debt held by those who have already graduated. Any writing off of fees and debt would be funded by the taxpayer.

Nick Hillman, head of the Higher Education Policy Institute, said: ‘Those politicians who promised to abolish past and present fees will be pleased this huge figure was delayed until after the general election, as this is the financial hole they need to fill.’

Even without Mr Corbyn’s plans, much of this sum will end up being paid by the taxpayer anyway, because student debts are written off after 30 years.

This means that while highearning graduates will make big contributions to paying back the public debt, middle to low-earning graduates will never earn enough to fully repay it. Mr Hillman added: ‘A total debt of £100billion is massive. This is a significant moment.

‘The total will keep on growing until those students paying £9,000 fees start making significant repayments much later in their careers.’

The figures show outstanding debt on loans rose by 16.6 per cent to £100.5billion at the end of March, up from £86.2billion a year earlier. At the end of March, there were 6.4million borrowers, 3.9million of whom had accounts liable to be paid.

Jake Butler, of money advice website Save the Student, said: ‘Lots of prospective and current university students will see these figures and worry about being part of an increasing pool of graduate debt.’

The rise has been driven partly by rules introduced in 2012, which will allow universities in England to charge up to £9,250 a year in tuition fees from the autumn.

In the year to March 31, 2012, student debt was just £45.9billion.

Sebastian Burnside, a senior economist at NatWest, said student debt was rising at a faster pace than any other form of debt, eclips-

‘Will keep on growing’

ing credit card debt of £68billion. ‘These latest figures show student debt is becoming a greater priority with every passing year,’ he told the Guardian. ‘Student debt is the fastest growing type of borrowing and is rapidly becoming economically significant.’

He predicted the debt was likely to hit £200billion in six years.

In England, the average amount of debt for each graduate is £32,220. By comparison, student debt in the US totalled $1.34trillion (£1.05trillion) at the end of March. But average debt per student at graduation was only $34,000 (£27,000).

Loan repayments are dependent on graduates’ income, with those earning more than £21,000 a year required to pay 9 per cent of their salary above that threshold.

A Department for Education spokesman said: ‘Everyone deserves a world- class education … and for many people that involves going to university.

‘ Our student finance system removes upfront financial barriers for anyone hoping to study and students only pay back what they can afford based on their income.

‘There are now record numbers of young people, including those from disadvantaged backgrounds, benefitting from higher education.’