Almost half of student loans are now paid for by the taxpayer – 57 per cent more than two years ago, government forecasts show.

Undergraduates taking out loans in 2018-19 will pay back just 53 per cent themselves, while the remaining 47 per cent will be covered by the public purse, according to official projections.

This is the greatest proportion that taxpayers have ever had to subsidise and will cost £7.4 billion this financial year.

Figures for last year’s cohort of students show the taxpayer picking up 45 per cent of the cost of loan repayments, up from 30 per cent the previous year.

Nick Hillman, director of the Higher Education Policy Institute, said: “It’s a big sum and a lot of people don’t know that it’s so high. Students think they are paying all the cost of their education themselves but actually taxpayers are picking up nearly half of the sum.”

Graduates need to start repaying loans when they earn £25,000. All loans are written off after 30 years, leaving the taxpayer to foot the bill for the rest.

Previously, graduates started repaying loans when they earned £21,000 but this was raised in 2017, which accounts for some of the reason why the amount repaid by graduates fell the following year.