Biggest student loan in England hits ?66,000
The biggest student loan in England is ?66,150, with the 20 largest debts owed to the Student Loans Company totalling more than ?1million.
All but one of the students went to institutions in London and were on courses that lasted at least five years, such as medicine and law.
Universities Minister David Willetts said the figures were 'unusual' but that those people were likely to earn substantial sums later in their careers.
The disclosure came after MPs voted to raise tuition fees to ?6,000 last December, with institutions able to charge up to ?9,000 in 'exceptional circumstances'.
And parents could be penalised for paying off their children's debts
But despite pleas from Ministers, Cambridge, Imperial College London and Exeter universities have already announced plans to charge the full amount.
Hundreds of thousands of graduates will have to repay almost double what they borrowed under the new tuition fees regime.
Figures produced for the Daily Mail show that some undergraduates who take out the maximum loan of ?43,500 to cover both course and living costs could end up repaying ?71,346.
They also reveal that anyone who earns more than ?24,000 a year during their career will have to repay significantly more than previous graduates.
The worst hit will be those who get the largest salary rises because they would be expected to pay back more of what they owe.
Those who only get small pay increases would never repay their debt, which will be written off after 30 years when most are 51.
HOW THE BILLS MOUNT UP
For a three year course:
Tuition fees (max of ?9,000pa) ?27,000
Maintenance (ave ?4,000pa) ?12,000
Total: ?39,000
Student One begins work on average earnings, gets a ?1,000 pay increase each year.
Total paid on loan: ?78,882
Balance: ?14,513 (written off)
Student Two has a ?2,000 pay rise each year, over and above average pay.
Total paid on loan: ?83,791
Balance: Cleared in 25 years
Student Three was paid ?4,000 above average earnings.
Total paid on loan: ?71,873
Balance: Cleared in 18 years
A Daily Mail investigation based on research by data analysts Moneyfacts has revealed that graduates on modest incomes could be hit with having 45p of every ?1 they earn taken from their pay cheque.
This would be taken in taxes such as National Insurance and income tax, plus student loan repayments and contributions to the new national pension scheme.
From 2012, a new student loan system will change the way debts are repaid and how much money university entrants can borrow.
From the coming academic year, universities will also be allowed to charge higher annual fees of up to ?9,000.
Currently, student loans start being repaid once a graduate earns more than ?15,000, and they then repay 9 per cent of earnings above this figure.
At present, the majority of graduates repay their loans after 13 years for men and 17 for women.
Under the new system, repayments start at 9 per cent once graduates earn ?21,000, but are expected to increase as their pay rises.
If the Retail Prices Index (RPI) were 2 per cent, a graduate earning ?21,000 would also repay 2 per cent in interest, while one earning ?22,000 would pay 2.15 per cent.
Once he or she earns ?41,000, the interest rate is frozen at the RPI plus 3 percentage points.
With the loan written off after 30 years, the Moneyfacts figures show graduates with a debt of ?43,500 who start on ?21,000 and get an average pay rise of 3 per cent a year would never repay all their loan. Instead, they would pay back ?33,217 over 30 years.
Those who get a 5 per cent pay rise would repay ?64,239 and have ?27,222 written off, and those who get a 7 per cent pay rise would repay ?71,346 but repay their debt after 28 years.
Moneyfacts assumed that inflation stayed at the Bank of England?s target of 2 per cent. However repayments are not the whole story.
Those earning more than ?21,000 will lose 9 per cent in student loan repayments, but also 20 per cent income tax, and 12 per cent on National Insurance.
Anyone graduating after 2017 will also have 4 per cent taken in pension contributions. This totals 45p in the pound.
However, Mr Willetts said: 'These examples are by no means typical. The new student loans are not like other forms of loans.
'If you are unable to pay back because of low earnings, no one will chase you and any outstanding debt is entirely written off after 30 years.
'Everyone will face lower monthly repayments, no graduate will have to pay a penny back until they earn ?21,000 and one-quarter of borrowers will pay back less in total than under the current system.'
Figures from the Chartered Institute of Taxation show a graduate earning ?22,000 will lose a total of ?5,829, some 26 per cent of their total pay.
At ?30,000 they would lose ?9,429, or 31 per cent.
Una Farrell of the Consumer Credit Counselling Service said: ?Teenagers are basically being asked to sign up to tens of thousands of pounds worth of debt that could hang round their necks for 30 years.
?They are storing up problems for the future with the scale of the borrowing.?
James Daley, editor of Which? Money, said: ?The fear is that graduates are taking on so much debt that they will just become blas? about it.
?They are going to face some enormously difficult decisions about their finances, about when they can start saving for a house and eventually look at putting money aside for their retirement.?
The biggest student loan in England is ?66,150, with the 20 largest debts owed to the Student Loans Company totalling more than ?1million.
All but one of the students went to institutions in London and were on courses that lasted at least five years, such as medicine and law.
Universities Minister David Willetts said the figures were 'unusual' but that those people were likely to earn substantial sums later in their careers.
The disclosure came after MPs voted to raise tuition fees to ?6,000 last December, with institutions able to charge up to ?9,000 in 'exceptional circumstances'.
And parents could be penalised for paying off their children's debts
But despite pleas from Ministers, Cambridge, Imperial College London and Exeter universities have already announced plans to charge the full amount.
Hundreds of thousands of graduates will have to repay almost double what they borrowed under the new tuition fees regime.
Figures produced for the Daily Mail show that some undergraduates who take out the maximum loan of ?43,500 to cover both course and living costs could end up repaying ?71,346.
They also reveal that anyone who earns more than ?24,000 a year during their career will have to repay significantly more than previous graduates.
The worst hit will be those who get the largest salary rises because they would be expected to pay back more of what they owe.
Those who only get small pay increases would never repay their debt, which will be written off after 30 years when most are 51.
HOW THE BILLS MOUNT UP
For a three year course:
Tuition fees (max of ?9,000pa) ?27,000
Maintenance (ave ?4,000pa) ?12,000
Total: ?39,000
Student One begins work on average earnings, gets a ?1,000 pay increase each year.
Total paid on loan: ?78,882
Balance: ?14,513 (written off)
Student Two has a ?2,000 pay rise each year, over and above average pay.
Total paid on loan: ?83,791
Balance: Cleared in 25 years
Student Three was paid ?4,000 above average earnings.
Total paid on loan: ?71,873
Balance: Cleared in 18 years
A Daily Mail investigation based on research by data analysts Moneyfacts has revealed that graduates on modest incomes could be hit with having 45p of every ?1 they earn taken from their pay cheque.
This would be taken in taxes such as National Insurance and income tax, plus student loan repayments and contributions to the new national pension scheme.
From 2012, a new student loan system will change the way debts are repaid and how much money university entrants can borrow.
From the coming academic year, universities will also be allowed to charge higher annual fees of up to ?9,000.
Currently, student loans start being repaid once a graduate earns more than ?15,000, and they then repay 9 per cent of earnings above this figure.
At present, the majority of graduates repay their loans after 13 years for men and 17 for women.
Under the new system, repayments start at 9 per cent once graduates earn ?21,000, but are expected to increase as their pay rises.
If the Retail Prices Index (RPI) were 2 per cent, a graduate earning ?21,000 would also repay 2 per cent in interest, while one earning ?22,000 would pay 2.15 per cent.
Once he or she earns ?41,000, the interest rate is frozen at the RPI plus 3 percentage points.
With the loan written off after 30 years, the Moneyfacts figures show graduates with a debt of ?43,500 who start on ?21,000 and get an average pay rise of 3 per cent a year would never repay all their loan. Instead, they would pay back ?33,217 over 30 years.
Those who get a 5 per cent pay rise would repay ?64,239 and have ?27,222 written off, and those who get a 7 per cent pay rise would repay ?71,346 but repay their debt after 28 years.
Moneyfacts assumed that inflation stayed at the Bank of England?s target of 2 per cent. However repayments are not the whole story.
Those earning more than ?21,000 will lose 9 per cent in student loan repayments, but also 20 per cent income tax, and 12 per cent on National Insurance.
Anyone graduating after 2017 will also have 4 per cent taken in pension contributions. This totals 45p in the pound.
However, Mr Willetts said: 'These examples are by no means typical. The new student loans are not like other forms of loans.
'If you are unable to pay back because of low earnings, no one will chase you and any outstanding debt is entirely written off after 30 years.
'Everyone will face lower monthly repayments, no graduate will have to pay a penny back until they earn ?21,000 and one-quarter of borrowers will pay back less in total than under the current system.'
Figures from the Chartered Institute of Taxation show a graduate earning ?22,000 will lose a total of ?5,829, some 26 per cent of their total pay.
At ?30,000 they would lose ?9,429, or 31 per cent.
Una Farrell of the Consumer Credit Counselling Service said: ?Teenagers are basically being asked to sign up to tens of thousands of pounds worth of debt that could hang round their necks for 30 years.
?They are storing up problems for the future with the scale of the borrowing.?
James Daley, editor of Which? Money, said: ?The fear is that graduates are taking on so much debt that they will just become blas? about it.
?They are going to face some enormously difficult decisions about their finances, about when they can start saving for a house and eventually look at putting money aside for their retirement.?
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