UK student loan debt expected to hit &pound;1tn by 2045

The student loan book is currently worth £70bn and is estimated to reach £1tn by 2045, according to a new report. The average student debt to the UK Government upon graduation in 2015 is expected to be £44,000, which is almost double the £25,000 average typical of previous years. However, as tuition fees look set to continue to rise, university admissions increase and opportunities for well-paid graduate jobs become even scarcer, it is feared that up to £4bn may never be repaid. The Labour Party has suggested that one solution to this issue could be to reduce current tuition fees to £6,000 per annum.

The student loan book is worth £70bn this year and is expected to continue rising steadily to £330bn in the next 30 years - £1tn with inflation

Exclusive: Student loan debt to hit £1trillion - and £4billion may be lost forever

Almost £1trillion will be owed to the taxpayer in student loans by 2045, as fees rocket and graduates struggle to get well-paid jobs.

The student loan book is worth £70billion this year. It is expected to hit £80bn next year and continue rising steadily to £330bn in the next 30 years, or close to £1trillion with inflation.

Meanwhile, it is feared £4bn in unpaid loans may never be clawed back from graduates who have already fallen off the radar.

A total of 270,746 “ghost” graduates have had no tax, employment or benefit records for at least three months and have not replied to the Student Loans Company’s requests to confirm how they are supporting themselves.

Student loan book

More than 75,000 of them have debt topping £20,000 – while 208 owe more than £50,000.

Jonathan Isaby of the TaxPayers’ Alliance said: “It’s crucial the Student Loans Company gets a grip on its processes

and universities do more to ensure that students are serious about study as opposed to picking up cheap loans

which they don’t intend to pay back.”

The average student debt to the Government on graduation has been around £25,000 but that is now soaring – sparking fears more and more will be unwilling or unable to repay the cash.

Those finishing university this year – the first to pay the higher £9,000 tuition fees – owe an average £44,000.

And the number of graduates not yet earning the £21,000 minimum to start repaying a loan is up from 480,000 to 523,000 in a year.

£21k Salary when graduates repay loan 30yrs When unpaid debt wiped £44k Average debt on graduation now

Labour has called for maximum tuition fees to be reduced to £6,000 over fears much of the debt will never be paid back.

Critics say university admission has been widened so much that graduates are no longer prized commodities in

the business world and end up getting trapped in low-paid jobs.

The Department for Business, Innovation and Skills said: “We are working with SLC to track anybody who should be paying and put arrangements in place for them to repay their loans.”