Student loan debt in the UK has risen to more than £100bn for the first time, underlining the rising costs young people face in order to get a university education.

Outstanding debt on loans jumped by 16.6% to £100.5bn at the end of March, up from £86.2bn a year earlier, according to the Student Loans Company. England accounted for £89.3bn of the total.

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

“As fees increase this number will only go up, as more and more money is lent out each year. There is some cause for concern here, mainly for the government, as it is now widely accepted that the majority of graduates will never pay off their whole student loan debt before it is wiped off 30 years after their graduation.”

Sorana Vieru, the vice-president for higher education at the National Union of Students, said student debt had risen to “eye-watering levels”.

The rise in student debt has been driven partly by rules introduced in 2012, allowing universities in England to charge up to £9,000 a year in tuition fees. In the year ending 31 March 2012, student debt was less than half the current level, at £45.9bn.

Jeremy Corbyn made younger voters a key focus of Labour’s election campaign, promising to scrap tuition fees for new university students. A strong turnout among 18- to 24-year-olds at last week’s election helped the party to win 262 seats, an increase of 30.

Sebastian Burnside, a senior economist at NatWest, said student debt was rising at a faster pace than any other form of debt, and eclipsed credit card debt of £68bn. “These latest figures show student debt is becoming of greater priority with every passing year. Student debt is the fastest growing type of borrowing and is rapidly becoming economically significant.”

Burnside predicted that over the longer term, student loan debt was likely to double to £200bn in six years.



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

Loan repayments in the UK are dependent on graduates’ income once they start working, with those earning more than £21,000 a year required to pay. Graduates earning at that level are obliged to repay 9% of what they earn above £21,000. However, after 30 years, any outstanding student debt is written off.

Martin Lewis, founder of the website Money Saving Expert, said that although the rise in outstanding debt increased the amount of money owed to the exchequer, it was irrelevant for students. “This is meaningless for students and graduates as individuals. It is a public policy and taxpayer issue.”

Vieru said: “These figures show how the cost of education has been systematically shifted on to the backs of individual graduates, in debt that will never be repaid.

“These figures raise serious questions about whether these loans are the best way to fund our education system and what’s best for the sector, taxpayers and the public.”

A spokesperson for the Department for Education said the loans system allowed more people to go to university. “Everyone, no matter what their background, deserves a world-class education so they can go as far as their talents will take them, 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, benefiting from higher education.”

Rising student debts come at a challenging time for consumer finances in general in the UK, which are being squeezed as prices rise at a faster pace than wages.



Burnside said student debt was an additional drain on people’s resources for an “astonishingly long time”, sapping the purchasing power of the graduate population.

He said it was unclear what the longer-term implications of rising student debts in the UK would be, following the introduction of the £9,000-a-year tuition fees. “We don’t yet know how graduates will respond, how it will affect their attitudes to pensions, savings, buying a house.”