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Student Debt

Volume 404: debated on Thursday 8 May 2003

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To ask the Secretary of State for Education and Skills what the average level of debt accumulated by university students and students in higher education at the end of their course of study was (a) in the most recent year for which figures are available and (b) in 1997; and if he will make a statement. [106593]

Student loan borrowers are liable to repay their loans from the April after they finish or leave their course, depending on their income. They are described as "entering repayment status" from that date. Students that started their course from the 1998/99 academic year will repay income contingent loans. Loans for those who started their course before 1998/99 are repayable on a mortgage style basis. The table shows estimates of average student loan debt at the point at which they entered repayment status for borrowers who became liable to repay their loans in financial years 1998–99 and 2002–03.New student support arrangements were introduced from academic year 1998/99. Most new students in that year (apart from specified exceptions) received support for maintenance expenditure through means-tested grants (about 25 per cent. of the support available) and non-means-tested student loans (about 75 per cent. of the support). From 1999/2000, students who entered higher education after 1998/99 received support for maintenance expenditure through loans. About three quarters of the value of these loans is not subject to means-testing. The repayments on these loans are on an income contingent basis.

Students who started their course up to 1997/98, and those who entered in 1998/99 under the existing arrangements, are eligible for mortgage style loans. Students in this category received support for maintenance through non-means-tested loans (about 50 per cent. of the support available), and means-tested grants for those that qualify (about 50 per cent. of the support).

The first cohort of students on a three-year degree course who entered higher education under the new student support arrangements became liable for repayment in April 2002. That cohort includes a disproportionate number of students on shorter courses as well as those who have left higher education before completing their courses. Therefore the average level of debt will not be representative of the average debt experienced by those who complete their courses.

Average student loan debt on entering repayment status1,2

Financial year entered repayment status3

Mortgage style loans £4,5

Income contingent loans £6


1Data rounded to nearest £10. Includes interest.

2Excludes any repayments which may have been made before borrowers enter repayment status.

3Borrowers enter repayment status in the April following their graduation or otherwise leaving their course.

4Loans made to students who entered higher education up to 1997/98 or who entered in 1998/99 under existing arrangements. Includes loans repayable to the private sector following the sale of two portfolios of student loans.

5Includes loans sold in the two portfolios of student loans which are administered by the Student Loans Company.

6Loans, repayable on an income contingent basis, available to students who entered higher education from academic year 1998/99. These loans were subject to a repayment holiday until April 2000. Includes hardship loans and the fixed rate loans (£500) to eligible part-time students.

7Not applicable.


Student Loans Company

Data on debts for which there is no public subsidy, such as overdrafts, credit cards, and informal debts to family and friends, are not available centrally.