About 110,000 students do not take out a loan and so avoid interest rates of 6.3%, according to the Intergenerational Foundation.

Instead, they rely on their families to pay the £9,000-or-more-a-year fees.

The think tank said this puts self-funders at a “serious economic advantage” to fellow graduates when it comes to saving power, spending power, and the ability to get a mortgage for “many years” after university.

Six Russell Group institutions have the highest number of self-funders: King’s College London, Cambridge, Oxford, University College London, Imperial and LSE.

“The current student loan system, while being clearly inter-generationally unfair, is also exacerbating intra-generational unfairness,” said report author Rakib Ehsan.

“Even though the number of self-funders has decreased dramatically since fees were increased to £3,000 and then trebled in 2012 by David Willetts, then Secretary of State for Education, wealthier families have realised that they can give their children a get-out-of-jail-free-card by helping them to escape sky-high interest rates and a 30-year loan that could be sold off to the private sector in the future.”

President of the National Union of Students, Shakira Martin, said: “This report is more evidence that the current system is not fit for purpose. While wealthy students can avoid accruing debt and the high interest which comes with student loans, too many students from low income families grapple with a cost of living crisis and unaffordable housing. Wealthy students can focus on their studies, while too many poorer students work long hours to make ends meet.”

Paying upfront isn’t always best

Paying upfront may not always be the best course of action as not everyone ends up paying back their full loan. It all depends on your future earnings.

If you started your course in England or Wales after 1 September 2012, you won’t begin paying your student loan back until you earn more than £25,000. From there, you pay back 9% of your income. The loan is wiped altogether after 30 years and for many people their salary will never catch up.