13+ Troubling UK Student Debt Statistics [Updated in 2020]
We’re all well aware that to get a quality high education, many UK students take up government student loans to cover general expenses like rent and tuition fees.
Student loans enable students from less well off families to pursue the course they like.
So, it should come as no surprise that the student loan percentage is quite high:
Around 66% of graduates have taken student loans, UK student debt statistics confirm. When we turn the percentage into real numbers, the student loan number reaches a whopping £17 billion every year.
Perhaps you’re wondering:
When were student loans introduced?
When is student loan written off?
To find out the answers to these questions and learn more about this burning topic, check out the facts and statistics we at Mark in Style gathered for you.
Astonishing Student Debt UK Statistics (Editor’s Choice)
- The average student loan debt in the UK is about £35,000. This is close to double the amount a typical American graduate owes.
- About 40% of universities are reliant on the tuition fees they are getting from students.
- Student loan interest rates are around 1.75%. Repayment starts when the debt holder is earning around £25,000 per year.
- Loans are forgiven in 30 years by the government if the balance hasn’t been paid off.
- The annual tuition fee for university courses currently stands at £9,250.
- Student loan debt is rising along with the increase in the standard of living. From 2016 to 2017, the loaned amount had increased for 20% of students, and from 2017 to 2018 for another 10%.
- In the course of five years, UK student debt has been repaid at a rate of 11% per year. During this period, the student loan interest rates in the UK have increased for about 33% of students.
- As of 2018/19, about 90% of student loans were taken by full-time undergraduates. The other 10% were divided between postgraduate students, EU students, and part-time undergraduates.
When Did Student Loans Start?
1. In 1998, as a result of the Teaching and Higher Education Act passed by Tony Blair’s government, the common maintenance grants were replaced with repayable student loans.
(Student Loans Company Limited Archived)
The same year saw the introduction of a tuition fee of £1,000. So, the Student Loans Company (SLC) prepared to provide up to £941 million. By the following academic year, once the tuition fees took effect, the SLC provided up to £1.23 billion in student loans.
2. The Student Loan Company was created in the 1990/1991 academic year.
(Student Loans Company Limited Archived)
The SLC was created to provide help with student living costs by giving out low-interest loans. Once the maintenance grants were replaced with repayable student loans, the first year SLC gave loans to 180,200 students. This number represented about 28% of the eligible students who had taken a loan of £390.
Total Student Loan Debt UK
Unfortunately, many students seem to be stuck with uni debt. Even if students leave the course early, they still fall into the category of students under the UK student loan repayment obligation.
So, after their future earnings pass the threshold level, students will have to start paying their loans.
As the average UK student debt keeps growing, the forecasts are that only 30% of graduates will fully pay their student loan amounts.
Let’s dive deep into the latest average student loan debt UK statistics below!
3. Around 1.3 million students take up a student loan every year.
(House of Commons Library)
The value of student loan outstanding reached £121 billion by the end of March 2019.
You think that’s a lot? Think again:By the middle of the century, the value of the outstanding loans will skyrocket to a mind-boggling £450 billion in 2019 prices. Click To Tweet
4. The total number of borrowers who own higher education loans increased by 6% and reached 5.3 million in April 2019.
Student debt in the UK has increased for 0.3 million people from 2018 to 2019. In 2019, about 20% have already closed their loan accounts due to the full payment of their student debt. Out of them, about 67.8% were in the UK tax system.
5. According to the Institute for Fiscal Studies, student debt will soon reach £50,800.
Student loan rates in the UK have a great impact on the increase in debt. Students from poorer backgrounds would even go over £50,800. The interest rate of 6.1% will result in students having accrued massive interest charges of up to £5,800 before they’ve even graduated.
6. According to UK student debt statistics, student loans rose by 30% between 2016 and 2018.
Student loans have increased in recent years, as has student debt. The reasons for the rise are the standard of living and the rise in tuition fees by 2%.
Even though the rise of the prices is slightly different, it has a great impact on student loans and the debt that has to be paid later on.
7. The maximum loan students at private universities can get is £6,000 per year.
Even though courses at private universities in the UK can cost more than £6,000 per year, this is the maximum amount students can take.
Students can get a private student loan tailored to their needs if they need a higher amount than the maximum given by the SLC, UK student debt statistics confirm.
However, they should keep in mind that taking up private student loans goes hand in hand with a higher interest rate.
Average Student Loan Debt UK
8. According to average student loan UK statistics, 991,500 borrowers have fully repaid their loans.
Since 1998, when student loans were introduced, 991,500 people have repaid their student loans in full. The number equals 19.3% of those who have become liable to repay the debt.
One more thing we have to take into consideration:
Once students start working, they have to earn more than £25,000 (from April 2018) to start paying off the student loan debt UK. The payment amounts to 9% of their total annual earnings.
You might be wondering:
What is the average student debt in the UK?
9. The average student debt of UK borrowers who finished their courses in 2018 was £35,000.
(House of Commons Library & UK Government)
When you keep in mind that students typically need to get loans for all three years of their undergraduate studies, the average debt UK graduates have to shoulder shouldn’t come as a huge surprise.
Here are the average loan amounts that full-time students borrow for the 2020/21 academic year. If the student is:
- Living at home, they can get up to £7,7747.
- Living away from home, outside of London, they could get up to £9,203.
- Living away from home, in London, they can get £12,010.
- Spending a year of a UK course studying abroad, they are eligible for a loan of up to £10,539.
Budget Student Loans
10. To see the living cost at a certain university, you can use the Student Budget Calculator.
If you’re having doubts concerning the exact price for accommodation, tuition fees, loans, or even maintenance loan repayment, you can use the Student Budget Calculator.
Just by typing in the name of the university, you can get an average price of the bills, food, and going out. Getting an already calculated monthly price will come in handy when planning which university you should go to.
This is an excellent option for students who are on a budget but still want to get a university degree.
11. Students in the UK can use the student finance help number – 0300 100 0607.
(Contact Numbers & UK Government)
When it comes to issues and concerns that revolve around student finance payback, taking up a loan, properly using the online rent calculator, or student finance interest rate, students can always use the helpline.
In addition to using the help number for questions, students enrolled in a university in England can also use it to inform Student Finance England of any potential changes that happen when studying.
For instance, students get in touch when they face drastic income changes or change or leave a course.
Last but not least:
Students can also use the line to inform the office when they’re planning to repay the rest of their debt.
The free helpline is open from Monday to Friday from 10 am to 5.30 pm.
Income-contingent Student Loan
12. Loan repayment is done through the employer who deducts the monthly payment and transfers it to HMRC.
The repayment of loans starts when the student has already left university and starts working and earning more than £18,330 (for Plan 1) or £25,000 (for Plan 2) loans.
Here’s the difference between the two:
- Plan 1 refers to loans taken by September 2012 in England, Wales, Scotland, and Northern Ireland.
- Plan 2 refers to loans taken after September 2012 in England and Wales.
And finally, the question we’ve all had at the back of our minds:
How long before student debt is written off in the UK?
13. For postgraduate students of England and Wales, the student loan write-off will happen 30 years from the April they were first due to repay.
Many students have doubts about whether their loan will get written off. The question mainly depends on the repayment plan the student is on.
Here’s the scoop:
For Plan 1 students from England, Wales, or Northern Ireland who have taken the loan in the academic year of 2006 or earlier, the student loan write-off age is 65.
All those who have taken a loan as of 2007 or later will have the loan written off 25 years after the April they were first due to repay.
For Plan 1 students from Scotland, the only difference is that they will have the loan cancelled after 30 years from the April they were first due to repay.
All those students who have a Plan 2 will have their loans written-off 30 years after the April they were first due to repay.
Additionally, students who have a certain illness or disability with proper evidence can get the SLC to cancel their student loans and have their debt forgiven.
And on that note:
Student loans are a convenient option, as they allow students who otherwise wouldn’t be able to afford it a chance to go to uni.
Nevertheless, the outstanding student debt in the UK reached a worrying £121 billion in March 2019 and is set to balloon in the next two decades.
UK student debt statistics show the government currently subsidises 47% of the cost of higher education. And if the current trend continues unchecked, less than one-third of all student loans will be fully repaid.
This situation is clearly unsustainable in the long term, and it needs to be addressed urgently.
- Saving for College
- Student Loans Company Limited Archives
- House of Commons Library
- Government Statistics
- Financial Times
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- Money Saving Expert
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- UK Government
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- Contact Numbers
- Universities UK
- The Guardian
- Money Advice Service
- Practitioners SFE