Education & Family

England degree debt 'highest in English-speaking world'

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University graduates in England face higher debts on graduation than their peers in the US, Canada, Australia and New Zealand, the Sutton Trust says.

The social mobility charity says those who graduated from English universities last year - under the £9,000 fees regime - owed an average of £44,000.

It says average debts in other English-speaking countries ranged between approximately £15,000 and £29,000.

The government says England's funding system is "fair and sustainable".

The Sutton Trust says on average American graduates owe between $29,000 (£20,500), for students at public or private non-profit universities, and $32,600, for those at private for-profit universities.

Students who left Canadian universities last year were on average 28,500 Canadian dollars (£15,000) in debt, those leaving Australian institutions were 39,700 Australian dollars (£20,900) in debt, and graduates from New Zealand universities owed on average 50,000 NZ dollars (£23,300), the trust says.

UK differences

The report - Degrees Of Debt - also highlights the growing complexity in arrangements in the UK nations, with different fee levels in Scotland and grants in Wales that enable Welsh students to take up places at English universities for less than £4,000 a year rather than up to £9,000.

The report recommends:

  • the Business, Innovation and Skills (Bis) Select Committee should report on higher education funding and provision each year, assessing the impact of changes on disadvantaged students, as well as mature and part-time students
  • better co-ordination between higher education ministers from England, Scotland, Wales and Northern Ireland to rationalise student funding policies across the UK
  • an investigation by the Office for Budget Responsibility into the impact of the latest changes to grants and loans, to ensure value for money for students and taxpayers
  • stronger evaluation of university spending of £750m a year on outreach and access programmes, to maximise their impact

Sir Peter Lampl, who chairs the Sutton Trust, said: "The massive increase in tuition fees from just over £3,000 to £9,000 per annum and the abolition of the maintenance grant results in the poorest English university graduates facing debts on graduation of over £50,000 with interest rates on the debt compounding at up to 3% over inflation.

"These debt levels are by far the highest in the English-speaking world and are more than double average debt levels at universities in the United States, where students study for four-year programmes, rather than three.

"They impact on the ability of graduates to go to graduate schools, to afford a mortgage, the timing of having children and other major life decisions.

"The cost of going to university has become so expensive that more young people should seriously consider higher level apprenticeships, preferably to degree level.

"By choosing this route, they will earn while they learn, incur less debt, and develop skills which are greatly valued in the workplace.

"We need more good apprenticeships to offer genuine alternatives to university degrees."

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Alice Barnard, chief executive of the Edge Foundation, which promotes vocational education, said: "The report makes a persuasive economic case for taking up a higher apprenticeship and studying for a degree sponsored by the employer."

A BIS spokesman said: "More people than ever before are now able to benefit from higher education, and the application rate for students from disadvantaged backgrounds is at a record level.

"As the Organisation for Economic Co-operation and Development has recognised, our student funding system is fair and sustainable.

"It removes financial barriers for anyone hoping to study, and is backed by the taxpayer, with outstanding debt written off after 30 years.

"Graduates only pay back on earnings above £21,000 and enjoy a considerable wage premium of £9,500 per year."

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