Spiralling student debts are now calculated at around a third of the average mortgage, according to new figures from financial education group, The Money Charity. The class of 2016 debt bill is well in excess of £41,000 – 35 per cent of the average outstanding mortgage amount of £117,162
With tuition fees increasing alongside the dissolution of maintenance grants, the rough debt for graduates who entered repayment this year was £24640; an increase of over £5000 from 2015.
One of the causes of rising debt was cited as the cost of accommodation, which requires ever larger loans to pay. Original stats from the charity last year found average rents growing by £277 between 2014 and 2015.
Money Charity Chief Michelle Highman explained that, for almost half of young people in the UK, becoming a student is the first step into adult life. However, she also explained the damaging side-effects of consistent and formative debt.
““Normalising large quantities of debt right at the start of people’s financial independence risks setting them up to fail. The size of these sums may also affect later borrowing, such as loans and mortgages.”
Despite the rising cost associated with higher education, this week, 86 per cent of final-year undergraduate students told the National Student Survey they were satisfied with their course, the same all-time high figure to have surfaced in the last two years.