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Student loans at sky high levels

According to recent reports student loans in the UK have smashed through the £3 billion barrier, and at the end of the financial year stood at £3.4 billion.

The data comes from the Student Loans Company. According to the figures the total amount borrowed in student loans in the previous financial year was £2.9 billion, so there has been a significant increase in the amount that students have borrowed over the past year. These figures were for total lending across England, Northern Ireland, Scotland, and Wales.

The total amount borrowed by English and EU students for the current financial year was £2.9 billion, and around £385 million of this was for tuition based loans.

According to officials there may be a number of reasons for the rise in the amount borrowed by way of student loans, and one explanation could be the increased number of university place applications, reflecting the increased number of people going into further education and therefore requiring student loans.

Higher education minister Bill Rammell stated: "The number of applicants applying for university in 2007 is up by six per cent compared to 2006. Providing loans and grants for students' living costs and tuition fees underpin the government's policy to both increase and widen participation in higher education."

Consumer groups on the other hand are concerned about the fact that students are finding themselves riddles with debt before they have even graduated from university, which means that they are starting out in the real work already burdened with student loans and repayments.

According to the debt charity Credit Action getting into to debt so early on encourages students to keep on relying on finance and debt as they move on in life, which could lead to serious debt problems later on.

Tom Smith
5th July 2007

More Information:

  • What's the Deal on Student and Graduate Loans?
    What do you need to know about student and graduate loans? First, it's good to know that the interest on these loans is much lower than a typical personal loan. However, it's also important to know that a student or recent graduate can become locked into a relationship with a lender through these loans, so careful choices is imperative.
  • What To Look For With A Graduate Loan
    There are many financing options available to students who have graduated from higher education. Once the student loan funding has stopped coming in, former students need a way of financing the transition from study to work.
  • Should I Use My Student Loan To Pay My Credit Card Debt?
    If you’re a student close to graduating one question you may be toying with is whether or not you should be using you student loan to pay for your credit card debt. The issues here can be a little complicated, so the following are a few pro and cons to using your student loan to pay off your UK credit card debt.


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