Scotland's poorest students hit hardest as debt 'skyrockets'

A new report by Audit Scotland has laid bare the level of student debt - with those from the most deprived areas of Scotland borrowing the most over a four year university course. Picture: PA
A new report by Audit Scotland has laid bare the level of student debt - with those from the most deprived areas of Scotland borrowing the most over a four year university course. Picture: PA
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Student debt has “skyrocketed” despite Scottish Government hopes to abolish it, it was claimed today, with Scotland’s poorest students ending up the deepest in debt.

A new report by Audit Scotland has laid bare the level of student debt - with those from the most deprived areas of Scotland borrowing the most over a four year university course.

Auditor General Caroline Gardner.

Auditor General Caroline Gardner.

The figures reveal that, on average, the poorest students - who make up 15 per cent of the student population - graduate owing just over £23,000, while those from the least deprived areas, on average, owe just over £19,840.

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Students from the 20 per cent most deprived areas borrowed, on average, £5,800 per year, compared to £4,960 borrowed by the least deprived students. Overall, student debt has doubled since 2011, rising to £5.5 billion.

The Auditor General’s report comes as the Scottish Government also revealed today that students from deprived areas also face disadvantages in post-graduate study. A report by the Commissioner for Fair Access states that the poorest students are less likely to study at post-graduate level.

Student debt has 'skyrocketed' it was claimed today.

Student debt has 'skyrocketed' it was claimed today.

Today, Scottish Conservative education spokesperson Liz Smith said: “Scotland’s future prosperity and the success of its young people depends on a thriving university sector.

“The level of student support matters so much to the decision made by our young people and that is why so many of them are angry that student loan debt has skyrocketed despite the SNP’s promises to eradicate it.

“It is high time the SNP government reviewed its higher education funding policies to ensure the sector is much more sustainable in the future.”

Scottish Labour’s education spokesperson Iain Gray added: “When the SNP came to power they promised to “Dump the Debt Monster”. Instead they slashed student grants and bursaries and looked on as students were forced into borrowing more to survive.

“The facts speak for themselves. Student debt has soared to £5.5 billion, and the average individual debt level on entry into repayment has more than doubled.

“Particularly worrying is the fact that it is students from the most deprived areas that are having to borrow the most, leaving them with more debt than students from more privileged areas.”

The Auditor General’s report revealed the average loan per student rose from £2,420 in 2008-09 to £5,300 in 2018- 19. And when students are employed at a salary level which ensures they can pay back the loan, they are facing an average repayment of £13,800 - up from £6000 a decade ago.

The report also highlights the potential impact on the well-being of students when they graduate with high levels of debt.

It states that the Students Awards Agency for Scotland does not publish a breakdown of the “distribution of remaining debt” by deprivation levels. It adds: “It is not possible, therefore, to draw any conclusions about whether those from the most deprived areas, and who borrow the most, also carry the debt for longer than those from less deprived areas.”

The report also reveals that since 2000, loans have been awarded to more than 654,000 people, but that by April last year only 140,700 had fully repaid their loan. The total number of individuals with debt still to repay is 505,800.

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"These issues lead logically to several questions for the Scottish Government, including the link between student loans and longer-term outcomes," it says.

“Are the costs associated with providing student loans financially sustainable? What are the implications for Scottish Government spending? How might clearer information on the personal cost of student loans, and the level of debt and potential repayment period, influence individuals’ decisions to undertake higher education? And what might the implications be for the Scottish Government’s aspirations to widen access to higher education?”

It adds: “In the medium to long term, how does carrying a high level of student loan debt affect individual students’ wellbeing? When defined narrowly, outcomes in the form of jobs that allow students to quickly repay their loan debt could help to mitigate any potential negative effects on wellbeing, while also making a positive contribution to the economy.

“But what wider outcomes are expected? For the economy, is there enough capacity to deliver the types of jobs that will support the Scottish Government’s aspirations?”

According to the report, there are also “significant variation in average earnings by course and institution” with median earnings for medicine and dentistry graduates five years after graduation being between £42,700 and £53,500, while earnings for philosophy and religious studies ranged from £24,600 to £31,200.

Caroline Gardner, Auditor General for Scotland, said: “Student loans are only one part of the package of student support but they represent a significant investment by the Scottish Government.

“These loans need to be repaid in full by either the students or the state, so it’s important that the figures are clearly reported to ensure the costs are sustainable and the impact on individual students is understood.”

Higher Education Minister Richard Lochhead said the level of student debt was two and a half times less than that accrued by students in England.

He said: “More full-time higher education students are receiving financial support as we continue to invest record amounts in students with 148,890 last year, up 0.7% on the previous year. Our commitment to free tuition means that, unlike elsewhere in the UK, Scottish students studying in Scotland do not incur additional debt of up to £27,000 and average student loan debt in Scotland is the lowest in the UK.

“This, along with increased overall student numbers, widening access to students from more deprived backgrounds and improved support makes studying in Scotland a more attractive prospect.

“Improvements to the student support package include increasing bursary support for the poorest students from £1,875 to £2,000 per year, while also increasing the payments for the poorest independent students from £875 to £1,000, meaning that the students most in need can access a package of £7,750 per year through bursaries and loans.

“I am also extremely proud that in addition to these increases, we are leading the way as the only administration in the UK to offer bursary support targeted specifically for care-experienced students. Our care-experienced bursary provides £8,100 per year and will be further expanded to students aged over 26 from the next academic year.”