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New figures show degree-length student borrowers in Scotland no longer have least average debt

December 17, 2014

At the end of last month, the Student Loans Company published the student borrowing figures for 2013-14 for students from England, Northern Ireland and Wales. Scottish figures came out in October.  This makes it possible to compare for the first time the figures for actual borrowing in every part of the UK in the last academic year.  This produces results in line with what looking at the models on paper predicted.

The figures show that within the UK, as a result of Scotland adopting its new, low grant system last year,  students from Wales  have now overtaken those from Scotland as the ones set to finish their degrees with the lowest average borrowing in practice.  The figures for those from Scotland and Northern Ireland are slightly higher.

Moreover, combining these figures with other data suggests that in practice low income Welsh students are now set to be leaving their degree course with around 70% of the debt of the same students in Scotland.

Borrowing levels in England remain higher and the gap between England and the devolved nations will increase. In practice, average annual borrowing in Scotland looks set to be just under half that in England.

Comparison between Scotland and the other devolved administrations

NI Scotland Wales
Average annual borrowing 6460 5020 6240

Average annual borrowing Scotland is still lower than elsewhere, now standing at around 80% of the figures for Wales and Northern Ireland.

However, take into account that degree students generally need to spend a year more studying in Scotland,  and the implied average borrowing in Scotland for a typical degree is now around 8% higher than in Wales, and only a couple of percentage points lower than in  Northern Ireland. (The Northern Irish figure below has been increased by slightly more than three times, see technical note 1 below).

NI(3yrs) Scotland(4 yrs) Wales(3 yrs)
Implied average degree-length debt 20790 20080 18720

Moreover, these are averages.  We know from recently published SAAS data that in Scotland those at low incomes borrow above average: in 2013-14 borrowers who claimed the means-tested loan, who must all be from low incomes, borrowed on average £5,780, 15% above the overall average (see technical note 2 below).  Conversely, data supplied by the SLC last year showed that in the other devolved administrations those from low incomes borrowed below the average – around 80% to 90% of the figure in Wales and 90% to 95%  in Northern Ireland (see technical note 3).

So at the lowest incomes, the implied average amount of borrowing for a typical degree in Scotland is £23,120 (four times £5,780).  In Wales it can be cautiously predicted to be 90% of the figure of £18,720 above: £16,600, or around 70% of the Scottish figure.

What’s more,  such students from Wales living away from home benefit from a more generous total package of support – that is, this lower borrowing was still providing this group with between £500 and £1,000 more a year to spend: see figure F here.  Those living at home mostly have more to spend in Scotland – but at low incomes the gap is not so large.

These figures exclude interest.  Interest rates are the same in Scotland and Northern Ireland.  In Wales they are higher, but the Welsh government currently undertakes to write off the first £1,500 of student loans on completion, which has the effect of cancelling out the effect of the higher interest charged.  So the figures above are reliably comparable.


England predictably has the highest figures.

Average actual borrowing in England has risen by £2,800 in total since the new fee regime came in.  In 2011-12, it was £6,330. In 2012-13 (around one-third of students under new system) it increased by £1,570 to £7,900.  The next year, 2013-14 (two-thirds under the new system) it rose by £1,230 to £9,130.  This reflects that the fee maximum rose by some £4,500: the rise is coming in roughly a third at a time.  The impact of the complex system of local fee waivers and bursaries, and the existence of courses with fees below £9,000,  may also be showing here: average borrowing for fees among those under the new system was £8,110 last year and is currently running at £8,160.

This all means that the Scottish actual average borrowing figure was around 55% of that for England last year.  Once the English system is fully rolled out, Scottish average annual borrowing looks set to be around 45% of that in England. Total actual debt for Scots at low incomes completing a degree in Scotland looks likely to be around 60% of the equivalent actual English figure (£38,000 approx, after adjusting for the higher interest rate applied in England).

Other factors to consider

These comparisons do not take into account that the loan scheme used for students from England and from Wales, as well as using higher interest rates, also collects repayments more gradually, at 9% of income over £21,000: Scotland and Northern Ireland use £17,000.  Debt is also written off after 30 years rather than 35 (used only in Scotland).  So more of this higher debt in England, in particular, is likely to be written off in practice.  That is problematic from a public finance perspective, but does mean that differences in headline debt will not necessarily translate into a similar  level in differences in repayments, particularly for relatively low earners.

These figures are for actual borrowers.  In Scotland some 30% of students are non-borrowers, compared to around 10% in other parts of the UK.  If actual borrowing figures were calculated as an average across the whole student population, the Scottish average would fall most from the figures above.  However, as non-borrowers come mainly from high income homes, doing this calculation would also reveal an even larger gap in borrowing between low and high income students in Scotland than is shown below.  For now, looking at the published figures provides a fair account of how systems compare for those who actually use them, who in all parts of the UK make up a comfortable majority of students, particularly at low incomes.

Technical notes

1      Around 30% of NI students go to England or Scotland to study, where they are liable for fees of up to £9,000.  This means that the 2013-14 figures for NI will not yet fully reflect the impact of the fee rise on students from there.  However, the effect of Year 3 of the new regime on the figures looks likely to be quite small. Over the first two years, average borrowing by NI students rose by only £460-470 pa and a further increase of that sorts therefore looks likely.   As noted above the total rise in the fee cap was £4,500, and it affects less than one-third of NI students, so a total rise in the average over the period of £1,500 makes sense.  Unlike the SLC figures,  Scottish published average figures above exclude borrowing for fees by Scottish students going south.  This group accounts for less than 5% of SAAS-supported students, however, so their effect on the average would be small:  from the SAAS figures it would have added around £150 in 2013-14.

2     These figures come from Table A11 of the latest SAAS statistics.  All those claiming the means-tested loan must by definition be from homes with incomes below £34,000.  Some of those claiming the lower rate loan may also be from lower income backgrounds, but choosing not to borrow the maximum they could. However, these are likely to a relatively small proportion of the group, based on comparison with other data provided by SAAS on income and numbers of grant claimants.

3     This conclusion can be drawn from the figures discussed here. It may be possible at some point to get the 2013-14 figures by income for other parts of  the UK, in which case these estimates could be updated.


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