1.8m People in £50,000 of Student Loan Debt

It has been revealed that almost 1.8 million people are now in at least £50,000 of student loan debt.

More than 61,000 have balances of over £100,000, while another 50 people each owe upwards of £200,000.

The BBC reported that the average balance for loan holders in England when they start making repayments was less than £45,000.

New government data shows that the amount has now risen to £48,470.

Balances can be much higher for those who study multiple or lengthy courses and often rise rapidly with interest.

In 2023/24, around 2.8 million people in England made a student loan repayment.

That means only a small fraction of those repaying their balances are in more than £100,000 of debt – but the majority do owe more than £50,000.

It comes after it was revealed that the highest UK student debt was more than £231,000. Around three months later, that figure has now hit £252,000.

Tom Allingham, from the website Save The Student, said such balances were “alarming” but were “in no way indicative of the norm”.

Personal finance expert Martin Lewis said the debts should be seen more like a “limited form of graduate tax”.

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.”

The National Union of Students (NUS) branded 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 how much is owed by that point. The terms are often 30 or 40 years but depend on your course and start date.

Speaking about his son, Arun* said:

“As the parent of a 17-year-old doing his A-Levels, I’m worried about how life will work out for him.

“How is it justified to charge 8% interest? How will he afford rent?”

It is more than 10 years since tuition fees were tripled in England.

From 2017, fees have cost a maximum of £9,250 per year across the UK. But in Scotland, students are charged a maximum of £1,820.

It is unlikely that many people will pay the full student loan back, with Manpreet* asking:

“How are we expected to grow the economy when we saddle young people with so much debt?”

Claire Callender, a professor of higher education policy and deputy director of the Centre for Global Higher Education, said that owing such high amounts is “likely to have a negative impact on graduates’ lives”.

Nick Hillman, the director of the Higher Education Policy Institute, admitted he was “most shocked” by the number of people in more than £200,000 of student debt.

He highlighted that the data suggests that fewer than 50 people owe at least £10 million between them.

Mr Hillman said: “Clearly, at that level, the student loan system is not working well because these people will not pay it all back.”

The Student Loans Company said people with higher than average balances “may be in receipt of several student loan products”.

This includes an Advanced Learner Loan for further education courses and funding for undergraduate courses, postgraduate Master’s courses and postgraduate Doctoral courses.

It said other factors behind high student debts could also include loan holders studying multiple or lengthier courses or holding more than one loan plan type, external.

The company added that some students receive additional funding due to “compelling personal reasons”.