Data from the Higher Education Statistics Agency (HESA) shows that less than 28% of recent graduates have begun repaying their student loans.
Of those students who graduated in 2015, the first group to have paid up to £9,000 in fees over the length of their degree course, an average salary of £21,000 means that half of those who are working are yet to start repaying their student loans.
With many still looking for work, working part-time, or continuing education, less than three in ten of all these new graduates are earning enough to repay their debts. Students are only required to start making repayments on their loans when they are earning at least £21,000 per year.
In fact, this £21,000 threshold has been frozen until 2020, despite the possibility of tuition fees rising and previous promises that this base-line would increase with inflation (like fees look set to do!). This not only means that more than two million graduates are now paying back more than they had signed up for when they took their loans, but also that higher fees mean longer periods of repayment.
As it stands, 75% of universities charge the maximum £9,000 tuition fees, despite a leaked private memo showing that government ministers questioned whether the high costs could be justified in light of the “quality and intensity of teaching” at some top universities.
A Cloud Of Debt
HESA statistics have shown that over 50,000 new graduates are employed in non-graduate roles, which has caused some to question the value of university degrees, and to wonder if many graduates will simply end up living their whole lives under a “cloud of debt.”
Of course, these figures will do little to alleviate the concerns of those from poorer backgrounds who may see the prospect of so much debt as enough to put them off going to university.
Time For A Rethink?
As it stands, with repayments set at 9% of everything earned over the £21,000 threshold, most students fail to repay their debts (plus interest) before their loan is wiped clear 30 years later. So perhaps, some suggest, it is time to change the idea of ‘student loans’ into ‘graduate contributions’ to prevent people being scared away from attending university.
Then again, isn’t this just a case of semantics unless we also change how the system works behind the name?