UK student loan debt soars 16.6% in one year
UK Student Loan debt has soared to over £100bn, as the SLC reveals the total amount of money owed jumped 16.6% in just one year.
The Student Loans Company has revealed that back in March, the total amount of UK student debt hit £100.5bn – a 16.6% increase on the year before, which totalled £86.2bn.
Whilst all UK countries were included in the figure, outstanding debt for students studying in England made up a colossal £89.3bn of the total amount.
Why is student debt soaring?
The trebling of uni fees to £9,000 back in 2012 will be the main reason for this increase; prior to this, student debt in England was less than half its current level (£45.9bn).
The substantial increase of 16.6% in just the last year, however, is most likely down to the fact that maintenance grants were scrapped and replaced with larger loans.
Whilst students from lower income brackets would have previously been given a chunk of cash to help with living costs that they wouldn't be expected to repay, these students are now graduating with more debt than anyone else as they qualify for the highest maintenance loans.
The level of interest accumulating on loans will also play a part in the debt jump. Student loans are tied to inflation (or, more accurately the Retail Price Index (RPI)) and as a result, interest rates jumped substaintially the last couple of years as RPI jumped.
Our own Student Finance expert, Jake, comments:
The impact of rising fees on young people tends to be more of a psychological than a monetary one. It’s important that young people remember that no matter how high the total debt figure is, they'll only repay 9% of what they earn above the repayment threshold.
The government are the ones who need to be concerned, as the majority of graduates will never pay off their whole student loan debt before it's wiped 30 years after graduation.
A spokesperson from the Department for Education has responded by saying the loans system has allowed more people, including those from disadvantaged backgrounds, attend university.
Jeremy Corbyn promised to scrap tuition fees completely in the run up to the recent general election if the Labour party were elected, and his party unexpectedly gain 30 more seats.
Do you know your facts from your myths when it comes to student loan debt? Look no further than this guide.