Graduates could repay double the debt they take on

Figures calculated for the BBC* have suggested that under the new tuition fees system in England, some graduates could end up repaying double the amount of debt they take on through student loans.

The figures show that a student taking on a debt of £39,000 over a three-year degree could repay £83,791 in total (in cash terms). After all, the interest charged on their debt could range from `inflation only` to `inflation plus 3%`, depending on what they earn.

To repay their student debt, graduates will be charged 9% of their annual earnings over £21,000 for as long as 30 years. Any debt left unpaid after this time will be written off.

Universities will be allowed to charge up to £9,000 a year for tuition fees from 2012. Students will also be able to take on debt in the form of maintenance loans - ranging from £3,575 to £5,288, depending on their parents` income.

The Government has said the system is `fair and progressive`.

*The calculations are based on students who take on a total debt of £39,000 (£9,000 in fees and £4,000 for maintenance per year over a three-year degree) and then go on to earn above the national average.



Gregory Pennington offer debt advice and debt management plans, as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.