Student debt has grown nearly five-fold since 2006 — but not as much as the headline number suggests
The average balance a borrower holds on entering repayment has risen 375% in cash terms since 2006/07. Once inflation is stripped out, the real increase is far smaller — still large, but a different story.
The average balance a borrower held on entering repayment rose from £10,050 in 2006/07 to £47,730 in 2025/26 — a 374.9% nominal increase. In 2025/26 prices, the 2006/07 figure is worth £17,408 — so the real-terms increase is 174.2%, not 374.9%.
Nominal vs real: the numbers everyone quotes overstate the real increase
Average balance entering repayment: nominal vs real terms
In cash terms the average balance rose 374.9%. Once converted to today's prices, the real increase is 174.2% — still large, but well under half the headline figure.
View data table
| Period | Nominal (that year's prices) | Real (2025/26 prices) |
|---|---|---|
| 2006/07 | 10050 | 17408 |
| 2025/26 | 47730 | 47730 |
England · Source: SLC/DfE, "Student Loans in England: Financial Year 2025-26" · as of 2025/26
The Higher Education student loan balance outstanding rose from £54.4bn in 2013/14 to £294.6bn in 2025/26 — a 441.5% nominal increase, or 285.4% in real terms once 2013/14 is converted to 2025/26 prices. (A separate, much smaller Further Education loan book is not included in this figure.)
Higher Education student loan balance outstanding: nominal vs real terms
The HE loan balance outstanding rose 441.5% in cash terms; 285.4% once inflation is stripped out.
View data table
| Period | Nominal (that year's prices) | Real (2025/26 prices) |
|---|---|---|
| 2013/14 | 54.4 | 76.4 |
| 2025/26 | 294.6 | 294.6 |
England · Source: SLC/DfE, "Student Loans in England: Financial Year 2025-26" · as of 2025/26
How the real-terms figures were calculated
Neither SLC nor DfE publishes a real-terms version of this actual historical series, so this page calculates it directly: each earlier figure is uprated using the Office for National Statistics’ CPI Index (2015=100), using the calendar-year annual average as a proxy for the financial year (2006 for 2006/07, 2013 for 2013/14, both uprated to 2025’s index value of 138.4). This is precise enough to show the scale of the gap between nominal and real growth, not represented as more exact than that.
A separate DfE real-terms figure exists — for a different population, not this series
DfE does publish one real/nominal pair of its own: Undergraduate borrowers starting their course in 2025/26, expected to owe £45,800 nominal (£40,800 in 2025/26 prices, CPI) when they eventually enter repayment, years from now. That is a forecast for a different, future cohort — not a real-terms version of the actual balance borrowers hold today — and this page does not blend the two.
Interest, and where the balance is heading
Interest accrued on the Higher Education loan book was £12.2bn in 2025/26, down 19.4% on the year before. Further Education loans, a much smaller and separate book, accrued £73.0m.
DfE’s own long-run forecast expects the total outstanding balance to keep growing to roughly £500–517bn in 2025/26 prices (real terms), peaking in the mid-to-late 2040s — a forecast, not an outturn, and kept visually and textually separate from the £294.6bn actual balance reported for 2025/26 above.
Confidence note
medium — two independent summaries of the same DfE release gave close but not identical figures; re-check the underlying forecast table before treating either number as exact
The fee timeline
1998
Up-front tuition fees introduced
Means-tested fee of up to £1,000 a year, paid up front by students or families — not loan-funded. Maintenance grants were replaced by loans the same year.
Teaching and Higher Education Act 1998 ↗2006
Fees become deferred and loan-funded
Up-front payment abolished. "Top-up fees" of up to £3,000 a year introduced, paid via an income-contingent loan rather than up front — the real starting point of the loan-funded system as it exists today.
Higher Education Act 2004 ↗2012
Fee cap raised to £9,000
A two-tier cap: £6,000 as standard, up to £9,000 where a provider met access conditions — in practice, almost every provider charged at or near £9,000.
gov.uk, "Changes to tuition fees and higher education" ↗2017
Fee cap raised to £9,250
The first rise since 2012, then frozen again for eight years.
Corroborated by the 2025 DfE announcement below; the original Commons Library briefing was not directly accessible — medium confidence on the exact date2023
Plan 5 introduced
Students starting their course from August 2023 move to a new repayment plan: lower repayment threshold (£25,000), longer write-off period (40 years), and interest fixed at RPI with no additional margin.
gov.uk, repayment plan guidance ↗2025
Fee cap unfrozen: £9,535
The first rise since 2017 (+£285, +3.1%), tied to a forecast inflation measure. DfE's white paper signals further rises in 2026/27 and 2027/28 for providers meeting quality conditions — a policy intention, not yet an outturn figure.
DfE, "Higher education reform to back opportunity and protect students" ↗
Which plan a borrower is on
Which rules apply to a borrower depends entirely on when they started their course, not on anything they choose. In 2025/26, the outstanding balance was split: Plan 1 10.8%, Plan 2 76.1%, Postgraduate 2.6%, Plan 5 10.4%.
View as table
| Plan | Who is on it | Repayment threshold | Rate | Interest | Written off after |
|---|---|---|---|---|---|
| Plan 1 | Course started before 1 September 2012 (England/Wales) | £26,900/yr | 9% | Lower of RPI or Bank of England base rate + 1% | 25 years |
| Plan 2 | Course started 1 September 2012 – 31 July 2023 | £29,385/yr | 9% | RPI+3% while studying; after study, income-scaled from 3.2% (at or below the threshold) up to 6.2% (£52,884+) | 30 years |
| Plan 4 | Scotland-domiciled borrowers (Student Awards Agency Scotland) | £33,795/yr | 9% | Same cap rule as Plan 1 | 30 years |
| Plan 5 | Course started on or after 1 August 2023 | £25,000/yr | 9% | RPI only, no additional margin | 40 years |
| Postgraduate Loan | Master's/Doctoral loan borrowers, England/Wales | £21,000/yr | 6% | Fixed at 6.2% | 30 years |
Repayment thresholds and interest rates are u...
Repayment thresholds and interest rates are uprated periodically and were current on gov.uk as of the date this page was verified — re-check the live gov.uk repayment pages before treating an exact £ threshold as still current, since these change without a new Act of Parliament.
What this does not show
Whether this debt behaves like a conventional debt
It is repaid through the tax system as a percentage of income above a threshold, not as a fixed monthly payment — see Chapter 11B for how income-contingent repayment actually works, and why a growing balance does not mean a graduate ultimately pays more.
What proportion is ever repaid
This page shows what is borrowed and what is outstanding, not what is forecast to be repaid versus written off — that is Chapter 11B.
Where the unrecovered money comes from or goes
This page does not trace the flow of money between government, SLC, universities and HMRC — that is Chapter 11C.
Last verified 2026-08-31. Data: SLC/DfE, "Student Loans in England: Financial Year 2025-26".
Related pages
- In this sectionThe price of a degreeThe rest of this chapter.
- In this sectionDoes student debt actually get repaid?How income-contingent repayment works, and who repays in full.
- Leaves this sectionPublic financesWhere the unrecovered cost of student loans sits in the government’s own accounts.
- In this sectionEducationThe other chapters, and how this section is built.
Scope and definitions
England, not the UK
Education is devolved. Every figure on this page is England only. Scotland, Wales and Northern Ireland operate different frameworks with different legal definitions, and their figures are not directly comparable.
Every deflation calculation is shown, not hidden in a chart
Where this page converts a figure to real terms, the CPI index values used and the calculation are stated directly rather than only shown as a chart — see the caveat under “Nominal vs real” above.