The Sutton Trust, founded in 1997 by Sir Peter Lampl, works to identify and pilot programmes in order to help non-privileged children. They undertake independent and robust evaluations, and scale up any successful programmes, often to a national scale.
The Trust and its partners have invested over £40 million into its work – which includes publishing over 140 research studies which have had a serious impact on the national education policy.
A recent study, entitled ‘Payback Time?’ has revealed that a typical student would now leave university with debts averaging over £44,000.
Students are now estimated to leave university with nearly £20,000 more debt than before tuition fees were trebled in 2012 – the majority of this increase is the result of higher fee loans, to cover higher tuition fees.
In cash terms, the study has revealed that graduates will now repay a total of £66,897 on average, once interest fees have been added.
It has been found that those who earn middle-rate incomes will be most affected: low earners will repay less, and high earners will be able to repay their debts more quickly, avoiding many of the high interest charges introduced within the new system.
Student loans don’t have to be paid off until the graduate is earning over £21,000 – it is then paid off at a rate of 9% of income above this threshold. They are automatically written off after 30 years; therefore meaning that some students will be repaying their debts well into their fifties. By this point, most graduates will still have tens of thousands of pounds worth of debt, which the government will have to write off.
Researchers in the study have stated that under the new system, graduates will be paying less until their mid-thirties, but will then be repaying more in their 40s and early 50s – around £2,000 a year. This all comes at a time when most will have children in school, a family to manage, and when mortgage costs are at their most pressing.
The study has also found that graduates will have to repay more than they borrowed, but it is estimated that only 73% of graduates will have repaid some of this debt by the end of the repayment period – around £30,000. This is close to the level where the Exchequer would find itself worse off than before the fee increase.
The report is asking that ministers have another look at the student loan system, as there is currently a double-debt trap of longer repayments for mid-earning graduates, and a potential loss for taxpayers.
How You Can Avoid This
If you’re coming to the end of your school life, and don’t want to take the ‘traditional’ university route, which includes the threat of facing many years in debt, apprenticeships are a brilliant alternative.
One of the many benefits to being an apprentice is that you earn a wage, rather than creating yourself a large future debt.
Apprenticeships can offer successful career pathways; it is now found that many members of staff with high-up positions within a company, started out as an apprentice. You gain the same technical knowledge that you would have at university, but it is gained during valuable practical experience that cannot be gained during a university degree.