04/08/05 - Students Face Debts Into Their 30's

Student Debt Warning

Graduates will be in debt until at least their mid-30s once new university tuition fees are brought in, education officials have admitted.

That is twice the present seven-year pay-off period calculated by the Institute for Fiscal Studies.

And the average level of debt, following the introduction of the annual fees of up to £3,000, would rise by around two-thirds to £15,000, the officials said.

Under the controversial new system, which only survived a Labour backbench rebellion by five votes, graduates begin to pay back the fees once they are earning £15,000 a year rather than having to pay them up front.

Around 400,000 students from poorer families will benefit from grants and bursaries to help cover the costs, and any unpaid debt will be written off after 25 years.

But reports today, in both the Daily Mail and The Times, predict that graduates will in fact face spending even more of their working life paying for their studies.

They said high street banks were predicting average debts of up to £20,000 by 2009 as students turned to them to top up the low-interest loans available from the state.