Graduates from English universities are most debt-ridden in the world

Graduates from English universities have the highest debt in the world according to research by think tank, the Sutton Trust.

According to Trust figures, the average UK student will amass a debt of over £44,000 by graduation. This figure far exceeds the £29,000 average debt facing graduates from private-for–profit universities in the US.

The gap is even wider when compared to students at public/private non-profit universities in the US, who face an average debt on graduation of £20,500 with significant numbers of students in the US benefiting from generous scholarships.

Students graduating from other Anglophone countries also face much lower debts than students in England. The average debt on graduation for a student from a Canadian higher education institution is £15,000, and £20,900 for a student in Australia. Six years ago, the average UK student debt stood at £16,200.

Debt has an impact on major life decisions

Sir Peter Lampl, chairman of the Sutton Trust and Education Endowment Foundation said: “The massive increase in tuition fees from just over £3,000 to £9,000 per annum and the abolition of the maintenance grant results in the poorest English university graduates facing debts on graduation of over £50,000 with interest rates on the debt compounding at up to 3% over inflation.

These debt levels are by far the highest in the English speaking world and are more than double average debt levels at universities in the United States, where students study for four year programmes, rather than three. They impact on the ability of graduates to go to graduate schools, to afford a mortgage, the timing of having children and other major life decisions.”

There is, however, some relief for students in the UK. Unlike the US, most students in the UK take state loans, which have income contingent repayment terms. Although interest rates on these state loans can be as high as 3 percent over inflation, this is still lower than interest rates on many loans in the US.

There is also concern about the impact on disadvantaged students

Following the coalition government decision in 2012 to triple student fees to a maximum of £9,000, tuition fees in England are among the highest in the industrialised world, averaging £8,800 per year. The maximum annual tuition fee was recently raised again to £9,250 and is likely to further increase each year as a result of new government policy from 2017/18 allowing universities to increase fees in line with inflation.

While full-time undergraduate university enrolment has recovered since the 2012 trebling of tuition fees, enrolment in UK institutions of part-time and mature
students, who are more likely than other students to come from poorer backgrounds, has declined markedly over recent years. Part-time first year student enrolments fell from 468,000 in 2009/10 to 266,000 in 2014/15.

There is also concern about the impact on disadvantaged students of the scrapping from maintenance grants in favour of loans.

The Sutton Trust has called for the Department for Business, Innovation and Skills (BIS) select committee to monitor higher education funding, in particular how it impacts disadvantaged pupils, including mature and part-time students.

The research also highlighted the growing complexity in arrangements within the UK nations with for example, differing fee levels in Scotland and lower fees for Welsh students studying in England.

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