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Students in England are finishing their degrees with government loans averaging £53,000, a jump of 10% in a year, as they increase their borrowing to meet the rising cost of living.
The Student Loans Company (SLC) has released figures showing individual loan balances were £5,000 higher in 2024-25 than a year earlier, when the average in England was £48,270.
In comparison, students in Scotland – where undergraduate tuition remains free for local students – finished with just £17,000 in government loans. Those in Northern Ireland accrued £28,000 in debt and those from Wales £39,470.
Rising costs also mean more students are taking on paid work during term time. A survey published by the Higher Education Policy Institute found 68% of full-time students worked for an average of 13 hours each week, the highest rate in the decade the survey has been conducted.
The SLC reported that 62% of former students who are liable to repay their loans are in the UK tax system, with nearly 3 million (40%) making repayments averaging £1,100 in 2024-25.
The government’s total student loan book for England has hit £266bn, up from £64bn 10 years ago after the introduction of £9,000 annual tuition fees and loans. That figure will rise more quickly from next academic year after the government raised the tuition fee for domestic students from £9,250 to £9,535 from September.
The extra income is unlikely to solve higher education’s financial woes, as the government plans to reduce the number of international students and competition between universities for domestic students intensifies. Research by the National Centre for Entrepreneurship in Education found that a quarter of the sector’s leaders say their institution will need a “complete overhaul” to survive the crisis.
More than half of the leaders surveyed said financial stability was now their “top institutional priority”, while 28% said that international student recruitment was their most important activity.
A new report by the Tony Blair Institute found that as tuition fees from UK students have been eroded by inflation, falling by nearly a third in real terms since 2012, many universities now rely on international student fees to cross-subsidise courses for domestic students.
The institute warned that a group of universities are now vulnerable to changes to student visas that the UK government is considering as part of its immigration white paper, including a 6% levy on tuition fees, stricter compliance regulations and a reduction in the amount of time international students can spend working in the UK after completing their course.
Alexander Iosad, the institute’s director of government innovation policy, said universities with lower international rankings and former polytechnics had weaker finances and were most reliant on international students, putting them most at risk from any visa changes.
The report says: “As the government seeks to reform the immigration system, it is worth considering the interplay of these changes with the broader need to reform the higher education funding system so that it is put on a more sustainable basis.”
