Britain’s student loan debt is now standing at a record £35 billion before the Conservative-led Government has even begun to introduce higher student loans and tuition fees, a new paper from the House of Commons library reveals this month.
The debt is predicted by the Government to reach £80 billion by 2017 as a result of its reforms. The rate of unrecovered loans – where people avoid paying anything back – is also expected to jump from 15 per cent to 50 per cent. Much of the unrecovered debt will come from women graduates.
The figures are revealed in a paper prepared for MPs by the library. They were released in advance of this week’s student demonstration in London against higher fees.
They show a dramatic reduction in those repaying loans and a rapid increase in the average sum of money owed by students. In the year 2000, 42 per cent of graduates had paid off their loan, falling to 24 per cent by 2003 and just 8 per cent by 2007.The amounts owing were also rising, as variable tuition fees were introduced under the last Labour Government. The average amount owed by graduates was £12,000 in 2009, £14,700 by 2010 and £17,200 by 2011.
The latest figures for 2008-09 for repayments are limited. The report says: “In 2008-09, of the 1.5 million accounts liable for repayment, 460,000 were repaying their loan, 200,000 were awaiting assessment of income in their first tax year and 770,000 (54 per cent) were below the income threshold or in another non-repayment category.”
Student debt has risen by over £5 billion alone last year. According to the provisional figures some 1.7 million maintenance and tuition fee loans were taken out last financial year worth £5.7 billion. The average value of maintenance loans was £3,650 and tuition fee loans, £3,110. No figures are now kept on the proportion of students claiming loans, but the Government estimates to be about 86 per cent of all students claim tuition fee loans ?and 80 per cent maintenance loans.
These figures will rise enormously by the time £9,000 a year tuition fees come in next year. The paper shows the Government is relying on wage inflation – which is not happening during the present recession – and are assuming that male graduates leaving courses in 2016 will be paid £220,000 a year in 30 years time, so they will be able to repay all the cash.
Despite the Government’s commitment to narrow the gender gap, figures released by the Department for Business, Innovation and Skills for predicted graduate women’s earnings in 30 years time will still be half that – some £110,000.
As the report says: “The gap between male and female earnings and its growth over time for the cohort are both very clear.”
