According to research, students in England face paying off debts which are equivalent to over one third of the amount owing on an average mortgage.
The Money Charity states that graduates from 2016 will face student debts of at least £41,000, once they start repaying their tuition and maintenance loans. The research also revealed that the average mortgage debt is £117,162. According to the government, a university education boosts earnings and employability, and that student loans are a sustainable and fair system.
Students who embarked on a degree in 2012 or later, paid the higher charge for tuition fees of £9,000 per annum, along with higher maintenance loans. The first students to pay the higher tuition fees graduated in 2015 and once they earn £21,000, will start repaying their loans. According to calculations by the charity, the amount owed by students has tripled since 2003. The research indicates that this is due to rising tuition fees.
Another factor in the take up of larger maintenance loans, is the rising cost of accommodation for students. The charity conducted a study last year, which revealed that the average cost of rent outside the Capital had risen by £277. From September 2016, maintenance grants for those students in England and Wales, on a lower income will be abolished.
Those people with outstanding student debt may face difficulty when applying for a mortgage, although CeMAP qualified mortgage advisers may be able to help them find a suitable loan.
