Student debt increases sevenfold

Top-up fees for students will be introduced from 2006.

Student debts for the year 2003-04 were seven times higher than nine years before, Universities Minister Bill Rammell has told MPs.

Statistics from the Student Loans Company showed publicly-owned debts up from £1.89bn to more than £13bn.

In a written reply to Liberal Democrat David Howarth, Mr Rammell said the average student debt was £8,430.

He said changes in the new maintenance grants to assist lower income students should help reduce borrowing needs.

The average debt of £8,430 for 2003-04 - in figures supplied by the Student Loans Company - compared with £3,530 in 1999-2000.

According to the Student Income and Expenditure Survey in 2002-03, final year students' average anticipated total debt on graduation was £8,666.

Whatever a student's circumstances, no student from 2006-07 has to pay fees upfront and the arrangements for repayment of maintenance and fee loans are fair and equitable Bill Rammell, universities minister

In his reply Mr Rammell said the substitution of a significant part of the new £2,700 maintenance grant for maintenance loans for lower income students should reduce the need to borrow.

He said: "We will be monitoring changes in borrowing patterns as the new student support arrangements come in.

"Whatever a student's circumstances, no student from 2006-07 has to pay fees upfront and the arrangements for repayment of maintenance and fee loans are fair and equitable.

"The graduate's repayments are at zero real rate of interest, related directly to earnings and only required when earnings are greater than £15,000 per year," he added.

Controversial plans to introduce university top-up fees in England are due to be implemented from 2006 after the government narrowly won the vote for its Higher Education Bill in the last parliament.

Full-time undergraduates will pay fees of up to £3,000 a year, with the poorest students being eligible for non-repayable support of up to £3,000 year.

The shadow higher education minister, Stephen O'brien, said he would be asking Mr Rammell to reveal how former students with such a high level of debt were finding the experience of paying back their loans, and what impact it had on their everyday lives.