Student loan debt in Scotland more than doubles to £5.5bn

Total student loan debt in Scotland has more than doubled since 2010, according to official figures.

A new report by Audit Scotland found the figure has risen to £5.5bn last year from a total of £2.4bn in 2010/11.

It calculated the average loan debt per student once they started repaying it was £13,800 – an 130% increase on the £6000 average recorded nine years ago.

The paper also shows the Student Awards Agency Scotland (SAAS) authorised living-cost loans totalling £533.6m in 2018/19, compared to just £187m in 2008/09.

Analysis by SAAS indicates students from the 20% most deprived (SIMD) areas of the country are borrowing more money than those from the least deprived, with an average of £5800 compared to £4960 for the upper 20%.

Audit Scotland recommends support should be provided through a mix of bursaries and student loans, with means-testing to target those from the poorest backgrounds.

Scottish Labour accused the SNP of failing to keep promises made prior to winning power in 2007 to dump student debt.

The party’s education spokesman Iain Gray said: “When the SNP came to power they promised to ‘Dump the Debt Monster’.

“Instead they slashed student grants and bursaries and looked on as students were forced into borrowing more to survive.

“The facts speak for themselves. Student debt has soared to £5.5bn, more than double what it was in 2011, and the average individual debt level on entry into repayment has more than doubled.

“Particularly worrying is the fact that it is students from the most deprived areas that are having to borrow the most, leaving them with more debt than students from more privileged areas.

“If we are to judge the First Minister on her record on education, or on her promises to students, then she has failed the test.”

Caroline Gardner, auditor general for Scotland, said: “Student loans are only one part of the package of student support but they represent a significant investment by the Scottish Government.

“These loans need to be repaid in full by either the students or the state so it’s important that the figures are clearly reported to ensure the costs are sustainable and the impact on individual students is understood.”

The Scottish Government has been approached for comment.

In 2018-19, £7m of student loan debt was written off, which happens when a person becomes permanently unable to work or reaches a time bar on having to repay oustanding monies.

Between academic years 1998-99 and 2006-07, any outstanding amount will be cancelled when the individual reaches 65 years of age or 30 years from the April after they graduated.

In or after academic year 2007-08, it will be written off 30 years from the April after they graduated.

At the moment, student loan repayments do not kick in until the person is earning a salary of £18,935 or more.