Over 61,000 people owe more than £100,000 according to figures from the Student Loans Company, following a Freedom of Information request by the BBC.
Further, postgraduates with a student loan account have an average balance of £48,470 once they start making repayments for the year 2023-24, a jump from £45,000 in the previous year.
The balance for borrowing by students in England and from nations in the European Union has surged in the last ten years.
In 2013-14 there was a total student loan balance for English and EU students of £72.4m, but that figure is now up to £1.8bn for 2023-24, according to Government statistics. Since 2022-23 that amount has rocketed by £126.7m.
However, the amount of loan repayments racked up by students should not be a cause for concern, according to one financial expert.
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‘Stop thinking of student loan as debt’
Martin Lewis of MoneySavingExpert wrote: “Stop thinking about student loans as debt – it works more like a tax. Why? The amount you repay each month depends solely on what you earn – as most in this survey will be on Plan 2 student loans that’s 9% of everything earned above £27,295.
“To make this clear: Let’s say you earn £30,000 a year – whether you owe £20,000, or £50,000, or £3,000,000 on your Plan 2 student loan, you’ll repay 9% of what you earn above the £27,295 threshold, so about £250 a year.”
Lewis added: “In other words, the amount you owe and the interest is mostly irrelevant, as it doesn’t impact what you repay each year.
“The only difference it makes is whether you’ll clear the borrowing within the 30 years before it wipes – and the vast majority of those on Plan 2 loans won’t.”
Dani Whitehead, chief marketing officer at financial wellbeing app Loqbox, said: “Thankfully, student loan debt doesn’t affect your credit rating, but these new figures are not an accurate reflection of the real debt students are in or the anxiety that mounting debt can cause.
Today, the Department for Education and the Welsh Government confirmed a change to the maximum interest rates those on Plans 2, 5 or PG (Postgraduate) will pay.
As part of its monthly review, it has capped the interest rate at 7.9%. This is to reflect “the comparable prevailing market rate (PMR).
