Outstanding student loan debt the highest ever at £2.2 billion

Published on Thursday 25 June 2009 23:04

MORE than £2.2 billion of student loans have still to be repaid, figures revealed yesterday.

The outstanding student loan balance at the end of 2008-9 was 2,227.4 million – the highest amount ever and 9 per cent more than the previous year.

This is the total amount of cash still to be repaid since the introduction of student loans.

However, the amount of money that was loaned to students by the Student Loans Company last year fell. The figures revealed higher education students received 191.3m during 2008-9 – 10 per cent less than the previous year.

Last year, the Student Loans Company (SLC) lent students in Scotland 179.8m for maintenance and 2.8m for graduate endowment payments – the fee students were required to pay after completing their courses.

The amount lent to students to pay their graduate endowment is 81 per cent lower than 2007-8, following Scottish Government legislation to abolish the charge.

Loan repayments totalled 77.5m last year – 28 per cent more than in 2007-8.

Education secretary Fiona Hyslop said: "In relation to the outstanding balance, the vast majority of this – 83 per cent, or 1.8 billion – was built up under previous administrations, with the total outstanding balance covering all outstanding amounts since student loans were introduced."

She added: "Our priority is to reduce this student debt at source through the policies we are introducing to tackle hardship and improve student support."

The education secretary stressed that the SNP government had restored the principle of free education in Scotland with the abolition of the graduate endowment fee.

Ms Hyslop said this was "benefiting up to 50,000 students and graduates and relieving some of the financial pressures on graduates as they start their working lives".

Ms Hyslop said that student support had been "inadequately funded by previous administrations".

She said: "That's why more than 84m has been set aside to address this, including 38m to introduce grants for part-time students, the 30m to improve student support as part of our consultation, and 16.1m for discretionary funds this year."