Student Finance

Education and Skills written question – answered on 24th April 2006.

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Photo of Peter Law Peter Law Independent, Blaenau Gwent

To ask the Secretary of State for Education and Skills what the average debt incurred by students on leaving university was in the last year for which figures are available; what the average time taken to pay off the debt has been to date; and what assessment she has made of the impact of the student loan scheme on the application for university places from children from working-class homes.

Photo of Bill Rammell Bill Rammell Minister of State (Lifelong Learning, Further and Higher Education), Department for Education and Skills

In 2005–06, the average amount of publicly-owned student loan debt in the UK on reaching statutory repayment due date (SRDD) was £8,350. Borrowers reach SRDD in the April following graduation or otherwise leaving their course.

The latest Student Income and Expenditure Survey 2004/05, which covered full-time and part-time undergraduate students in higher education institutions in England and Wales, found that full-time final year students' average anticipated total debt on graduation was £7,918 in 2004/05. Debt in this instance is defined as total borrowings offset with total savings. Borrowing included student loans, overdrafts, credit cards, commercial loans and informal loans.

The average time to repay a mortgage style loan (primarily loans taken out before 1998), for all those who have fully repaid to date, is five years (figure to nearest whole year). This is based on the time taken from a student reaching their SRDD until the loan account is fully repaid. Customers who repay early before reaching their SRDD have, for the purposes of the analysis, been treated as having a repayment time of zero.

It is too early in the scheme to provide a meaningful average for the time taken to repay an income contingent loan, as this scheme is relatively new and only 2 per cent. of these loan borrowers have repaid their loan in full to date.

No specific assessment has been made of the impact solely of the student loan scheme on the application for university places by children from working class homes. However, the following table shows that the proportion of entrants from the lower socio-economic groups has increased steadily over time, a trend which continued during the period when tuition fees and income contingent loans were introduced.

Proportion of young (under 21) UK domiciled entrants to full-time first degree courses at UK HEIs
Proportion of entrants to higher education from:
State schools Lower social classes (IIIM, IV, V) Lower socio-economic groups (4–7) Low participation areas
1997/98 81.8 24.9 n/a 12.1
1998/99 85.0 25.1 n/a 12.3
1999/2000 84.9 25.3 n/a 12.4
2000/01 85.7 25.4 n/a 12.5
2001/02 86.0 25.8 n/a 13.1
2002/03 87.2 n/a 28.4 13.3
2003/04 86.8 n/a 28.6 13.9

n/a=Not available.


The socio-economic group classification was introduced in 2002/03 to replace the social class groupings. The two classifications are not directly comparable.


Performance Indicators in Higher Education.

Repayment of income contingent loans is linked to income after leaving university or college so that leavers only repay as and when they can afford to do so, and not until income is over £15,000 per year. Under the new system from 2006/07, students from low-income backgrounds will be entitled to a maintenance grant of up to £2,700 per year, and an institutional bursary of at least £300.

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