The University of Manchester in England, one of many schools in the UK that students are taking out loans to attend, but are unable to repay those loans.
According to new data released by the Student Loans Company for the 2016/17 academic year, student debt in the U.K. has soared to more than £100 billion for the first time ever.
National student loan debt in the U.K. has increased by 16.6 percent since last year. All in all, the total outstanding student debt has increased from £86.2 billion to £100.5 billion as of March 31, 2017. The majority of this debt is held by England alone. By March 31, 2016, England owed £76.2 billion in student debt; by the same date next year, that total rose to £89.3 billion, a 17.2 percent increase.
Scotland, Northern Ireland, and Wales have all experienced rises in student debt, but not on the same scale as England. Scotland saw a 12.5 percent increase in debt (£4.5 billion this year from £4 billion previously). Wales experienced a 12.1 percent rise after student debt increased from £3.3 billion to £3.7 billion. Northern Ireland saw student debt rise from £2.7 billion to £3 billion, an 11.1 percent increase.
Why is national debt in the UK rising at such a rapid pace? According to many, it boils down to the rules introduced in 2012 that allowed universities to charge £9,000 a year in tuition fees. In 2012, national student debt was at £45.9 billion, less than half of what it is now.
At any rate, none of this is welcome news for the government or taxpayers. The rise in education costs and student lending could spell bad news for the government, and taxpayers especially, who risk losing a large chunk of cash through simple write-offs.
After 25 years of repayment, a U.K. student debtors bill is wiped clean. With that in mind, it is easy to see how the government is losing money through subsidized higher education. Furthermore, many critics and analysts believe that the large majority of students in the U.K. will never pay off their student loans in full.
“As fees increase this number will only go up, as more and more money is lent out each year. There is some cause for concern here, mainly for the government, as it is now widely accepted that the majority of graduates will never pay off their whole student loan debt before it is wiped off 30 years after their graduation,” said Jake Butler, a voice on Save the Student, a financial advice website.
In a statement made to the Guardian, Vice President for Higher Education at the National Union of Students, Sonora Vieru, said, “These figures show how the cost of education has been systematically shifted onto the backs of individual graduates, in debt that will never be repaid.”
Earlier in the year, interest rates on government education loans in the U.K. saw an increase which should only add to the debt tally by next year. On top of that, the U.K. is currently trying to address an issue with foreign EU students who are neglecting their student debt. All of these developments point towards more debt instead of a solution.
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