Francesca Di Fazio


Student loan debt in Scotland has more than doubled over the last 10 years, according to a new report.

The figures released in January by the Auditor General of Scotland, the body responsible for auditing most of Scotland's public bodies, show that between 2011 and 2019 the total student debt burden increased by 120%; increasing from £2.5b to £5.5b.

Since the Student Awards Agency of Scotland (SAAS) has covered the tuition fees of Scottish and EU full-time students since academic year 2000/01, the bulk of the loans concerns living costs. In the academic year 2018/19, SAAS found 100,600 students eligible for student loans. The total disbursement is now £533.6m, which is a 185% increase compared to 2008/9, when the figure amounted to £187m. The report also shows that students from deprived areas tend to borrow more, with the average loan amounting to £5,800, while students from more affluent areas borrowed on average £4,960.

Under current legislation, the accumulated debt starts being repaid after graduates reach a certain annual salary threshold. After 30 years, any remaining debt is written off. In 2019, students entered repayment with an accumulated debt burden of £13,800 on average, 130% more than their counterparts in 2010/11.  

In response, the Scottish Labour Party has accused the SNP of going back on their promise in 2007 to cancel student debt. However, first minister Nicola Sturgeon has claimed that the debt burden in Scotland is significantly lower than in the rest of the UK. 

The Ministry for Further and Higher Education has laid out a plan to address the issue. This includes a supplementary annual £21m investment to ameliorate student support, including expanding the availability and amount of non-repayable bursaries for students from the lowest income families and for care-experienced students. From 2019/20, all students aged 18 and over who are eligible for further education will be guaranteed a bursary award. The age limit of 26 for access to the annual £8,100 bursary for student carers will be abolished. The plan also aims to improve students’ financial literacy by providing guidance on the whole process.

Under the new plan, the responsibility of calculating the salary threshold for entry into repayment will be taken by the Scottish Government, which has committed to raising it to £25,000 from April 2021. The threshold normally increases with inflation, and for the current year it is set at £18,935. 

The portion of student debt not expected to be repaid, due to annual readjustment based on revaluation of loans as financial assets to "fair value", will be classified as government spending. This amount has grown overtime. The report hence raises questions on the financial sustainability of the project.

The President of the National Union of Students Scotland, Liam McCabe, commented on the Government’s new plan: "Whilst investment in non-repayable bursaries for students most in need has increased, including the continued uptake of the care-experienced bursary, the Scottish Government must recognise this clearly does not go far enough and provide more financial support to Scotland’s students. They must now deliver on the recommendations of the Student Support Review – now three years on - to improve student support and realise our shared ambition of a Real Living Wage for all of Scotland’s students, helping alleviate poverty, deprivation, and debt for students across the country".

Data and figures used in the briefing were provided by the Scottish Government’s Consolidated Accounts, SAAS, and the Student Loans Agency, a non-profit organisation owned jointly by the UK and the devolved administration. The report is available on Audit Scotland’s official website.

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