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When does £7,600 mean £18,500, or more? The problem with “final debt” figures

June 25, 2014

The Scottish Government has often defended  the Scottish system of student support from criticism by drawing attention to differences in what it terms the “average student loan debt” in each part of the UK.  This post discusses the limitations of these figures.

The Student Loans Company publishes figures every June for the average amount owed by students in each part of the UK at the point they “enter repayment” –  in effect their “final debt”. The figure represents the amount students owe on the 1 April after completing their course, or after dropping out. The latest such figures are now available, with the Scottish figure now standing at £7,600, an increase of 11% from last year.  It is this data set which the Scottish Government has often used as the basis of inter-country comparisons on student borrowing.

How these figures are used

A  government press notice [Free tuition keeps debt down] made these figures its headline in June 2012, but the same and later versions of these figures have also been quoted more recently elsewhere.

Speaking in the Scottish Parliament in June 2013, the Cabinet Secretary said:

Let us look at student debt figures, which are crucial. The UK graduates survey in 2012 showed clearly that the average student loan debt for Scottish students at that stage was £6,480, compared with £17,140 in England and £13,650 in Wales—that is without student fees. [Note: the source is the SLC, as above: the figures do include fee borrowing, albeit at the pre-2012 level of just over £3,000 a year.] 

In a letter to The Scotsman on 25 November 2013, in response to a report on student debt, the Cabinet Secretary observed:

The Scottish Government is committed to the principle of free education and pays the fees of Scots-domiciled students who choose to attend university here, meaning that levels of debt are much lower than in the rest of the UK. For example, figures published by the Student Loan Company year show that average student loan debt for Scottish students is £6,850 compared with £18,740 in England and £14,910 in Wales.

I would be grateful if any ­future stories could reflect such geographical context and the differing the policies of the Scottish and Westminster governments to avoid giving our prospective students and their families the wrong impression.

These figures were quoted again on 8 November 2013 in the response to PQ S4W-17799, which asked the Scottish Government “what analysis it made prior to the publication of the 2013-14 draft budget of the impact of changes in student support in 2013-14 on the level of debt that will apply to students from lower-income households?”.  The Cabinet Secretary responded:

Based on the support arrangements that apply in 2013-14, students from Scotland from the lowest income households who are eligible for a total maintenance package of £7250 will accrue a maximum annual debt of £5,500.

This policy was considered in the context of debt figures published annually by the Student Loan Company, the latest version of which shows that average student loan debt for Scottish students is £6,850 compared to £18,740 in England and £14,910 in Wales.

They were quoted by the Cabinet Secretary again in a parliamentary debate on 8 January 2014:

It is absolutely clear that, if we look across these islands, Scottish students have a great advantage, as debt levels have soared elsewhere. … Student debt levels are soaring. I will give members the figures. Student Loans Company figures that were published in 2013 show that the average student loan debt for Scottish students is £6,850. In Wales, it is £14,910 and in England it is £18,740. Those figures tell members the truth: higher education in other parts of these islands is being monetarised. It will not be monetarised in Scotland.

What these figures tell us – and what they don’t

It is true that the gap between the raw averages in this data set is large and the absence of fee payments undoubtedly does much to explain that.

But as a way of comparing the various UK systems, particularly as they are  functioning now, these figures have serious flaws.  They are in particular a very poor guide to current and prospective students in Scotland as to how much debt they can expect in absolute terms.

The principal difficulties with these figures are:

  • they are historic, providing a snapshot of the debt position of a cohort of students who entered the system several years ago and which has now left. The effects of more recent policies which increase debt – whether raising the fee cap to £9,000 in England or lowering grants in Scotland – will not show up.  Even the most recent figures deal only with those who left in the summer of 2013, before the recent Scottish grants reductions took effect.
  • many more students in Scotland do relatively short courses. A much larger minority of those entering repayment in Scotland have studied a course lasting only one or two years. This pulls down the total average final debt figure.  Direct data on the average period of study is not available, but by using detailed figures on historic average borrowing, it is possible to show that the SLC’s average final debt in Scotland has consistently represented only around two-thirds of the average amount that a 4 year honours degree student would have accumulated (see table below).  By contrast, a similar calculation for other UK jurisdictions shows that the final debt is only marginally below what would be accumulated on average over the three years of a standard honours degree (see table below). So comparing Scotland with the rest of the UK using these figures is in effect comparing the cost of two-thirds of a standard length degree course with the cost of a whole one.  If the most recent SLC figure in Scotland reflected  four years of average borrowing for those graduating in 2013, it would be around £11,000.
  • there is wide variation round the average in Scotland, with those from the very lowest incomes borrowing well above the average.  In other parts of the UK, borrowing is much more evenly spread by income.  A Scottish student assessed as having nil income  who finished in 2013, having borrowed the average amount for that group for each of the past four years,  would have  had a final debt of around £18,500 (see table below), much the same as the average final debt in other parts of the UK at that point and almost two and a half times the  average of £7,600 for Scotland.

In short, there is no doubt that free tuition has played a significant part in keeping down average final debt in Scotland.  But so has the greater number of students not studying all the way to degree level, and even more so the relatively low borrowing by those from higher income homes.

Most importantly, the very large rise in student borrowing expected by the Scottish Government as a result of this year’s changes to student support make these figures of entirely historic interest, except perhaps for Welsh and Northern Irish students (in NI) for whom the system is not changing so radically as in England or Scotland.  Under the new Scottish arrangements, the differences in average debt levels for students between Scotland and the other devolved administrations will be much reduced.

So the SLC’s historic final debt figures are very different from current average annual borrowing  and therefore do not provide relevant information on how much absolute debt is now likely to be incurred by current or prospective students in Scotland, particularly those from low incomes. Nor are they a reliable guide to the degree of difference between Scotland and the rest of the UK, especially the other devolved administrations.

As the Cabinet Secretary rightly says, it is important young people considering higher education are not given  the wrong impression by the way figures are used in reporting and debate.  For that group, these figures are among the least useful, while even for those with a more general interest in the issues, they still do little to illuminate the effects of current policy.


Technical notes

Note: the calculations of cumulative borrowing below are not adjusted for interest. Interest rates were the same across the UK in this period, for all the cohorts concerned.  Adding interest would further reduce the figures in % and “implied period” columns, but would not alter the general picture.

Figures in bold are the latest SLC  ones for actual final debt in each country.

Scotland: comparison of cumulative average actual annual borrowing over previous 4 years with actual final debt

Repayment cohort (leavers in previous year) Average borrowing for  maintenance over previous 4 years: cumulative Actual average final debt
£ £ Actual final debt  as % of average 4 year borrowing Implied borrowing period (years)
2010 9250 5950 64 2.6
2011 9440 5980 63 2.5
2012 9910 6450 65 2.6
2013 10540 6830 65 2.6
2014 11240 7600 68 2.7



Rest of UK: students entering repayment in 2014.  Comparison of cumulative three year actual annual borrowing (source as above) with actual final borrowing.  Fee loan averages from House of Commons Library research: English figure provided used for all three countries, as fee systems were functionally identical for this cohort.  Higher average maintenance borrowing in England than Wales or Northern Ireland for this cohort is likely to be due partly to the number of students in London, which attracts additional loan for living costs.

Average borrowing for  maintenance over previous 3 years: cumulative 11050 9160 9380
Average  fee loan over previous 3 years: cumulative 9665 9665 9665
Total average  loan over 3 years: cumulative 20715 18825 19045
Actual final debt as per latest SLC figures 20100 17310 17720
Actual as % of 3 year actual borrowing 97 92 93
Implied period of borrowing 2.9 2.8 2.8


Average borrowing by Scottish students assessed as nil income: average loan accumulated over 4 years.  Source: Table 12 of Scottish government statistics , various years.


2009 4265
2010 4508
2011 4805
2012 4965
Total over 4 years 18543
as % of Scottish average final debt (£7,600) 244%

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