{"text":[[{"start":8.66,"text":"Graduates of Britain’s top universities have the highest debt on the most contentious student loan plan, sparking new claims of a “tax on ambition”."}],[{"start":17.68,"text":"The average Russell Group alumnus repaying a plan 2 loan owes £52,412, thousands of pounds more than graduates from other institutions, according to FT analysis of the first detailed official data on debts by university."}],[{"start":33.6,"text":"Some of the difference is likely to be due to longer courses and lower dropout rates at top universities, along with higher costs for students who are more likely to live away from home."}],[{"start":44,"text":"But experts also pointed to the impact of interest rates, which increase by up to 3 percentage points for higher-earning graduates, leaving those who go on to well-paid jobs struggling to pay down their balances."}],[{"start":55.44,"text":"Oliver Gardner, founder of the student loans campaign Rethink Repayment, said the data from the Student Loans Company, which was provided to the FT under freedom of information laws, highlighted how “even graduates who go into relatively well-paid professions are seeing their loan balances soar despite making significant monthly repayments”."}],[{"start":75.28,"text":"He called this a “tax on ambition” that “is trapping millions of ambitious young people in a vicious cycle of ever-increasing student loan debt”."}],[{"start":83.64,"text":"Anger has been simmering for months about the Plan 2 loan system, for those who started undergraduate degrees between 2012 and 2022."}],[{"start":92.44,"text":"In July the cross-party House of Commons Treasury Committee accused ministers of mis-selling loans to young people and urged a reversal of a decision by former chancellor Rachel Reeves to freeze at £29,385 the threshold at which graduates start to repay 9 per cent of their salary."}],[{"start":110.56,"text":"Lord William Hague and Lord Chris Smith, the chancellors of Oxford and Cambridge universities respectively, have also called for reforms to the system."}],[{"start":null,"text":"

"}],[{"start":118.96,"text":"When she was appointed education secretary last month by Prime Minister Andy Burnham, Lucy Powell said the issue of plan 2 loans was “top of my in tray”, criticising “egregious” interest rates."}],[{"start":130.24,"text":"However, the Treasury has warned that reform could cost more than £5bn and cautioned that other areas of public spending, such as the NHS and early years, should take priority."}],[{"start":141.12,"text":"Data from the Student Loans Company on outstanding plan 2 balances by institution showed wide variation in debts."}],[{"start":148.28,"text":"Former students of the Royal Veterinary College, who study for five years rather than the three standard elsewhere in England, have the highest average debt at £86,979. The lowest debts are among those who used plan 2 loans to attend adult education colleges, typically for shorter periods."}],[{"start":166.36,"text":"Among larger institutions the lowest average debt is among graduates of the Open University, which charges fees based on modules and whose students study remotely, at £11,194. The highest is at Imperial College London, where degrees are often four years, running to £63,075."}],[{"start":185.4,"text":"Overall, borrowers from the 24 research-intensive universities that make up the Russell Group have an average outstanding balance of £52,412, compared to £45,498 across all higher education institutions and £47,777 for graduates of universities that belong to MillionPlus, the advocacy group for post-1992 universities."}],[{"start":211.16,"text":"Some graduates will have been making repayments for more than a decade, but the outstanding balances are similar to the £47,730 average debt of those who graduated this summer under the replacement plan 5 scheme."}],[{"start":null,"text":""}],[{"start":223.92,"text":"Hollie Chandler, director of strategic policy at the Russell Group, said: “Higher average debt at Russell Group universities may reflect that more students are completing courses lasting more than three years, like medicine, dentistry or engineering, and continuing into postgraduate study."}],[{"start":240.08,"text":"“Russell Group students are also typically more likely to live away from home, which involves higher living costs and access to bigger maintenance loans,” she added."}],[{"start":249.12,"text":"But Chandler said it was “clear that many graduates feel the current system is challenging” and that it was “important the system offers graduates stability, transparency and fairness”."}],[{"start":259.08,"text":"Nick Hillman, of the Higher Education Policy Institute, cited the same factors but said that, since Russell Group graduates tended to earn more, some of the higher debt “could be because the full interest rate applies only if you’re on a pretty decent salary”."}],[{"start":272.72,"text":"Unlike the previous and subsequent loan plans, where interest is charged at retail price inflation, interest on plan 2 loans starts at RPI when borrowers’ income is below £29,385 and rises to RPI plus 3 percentage points once earnings are over £52,885."}],[{"start":291.6,"text":"Scottish universities, which also have four-year degrees and charge English and Welsh students higher fees, also have high average balances, led by St Andrews at £65,282."}],[{"start":null,"text":""}],[{"start":304.2,"text":"The data covers plan 2 undergraduate debt among those eligible to repay because they have graduated or dropped out, but does not include plan 3 loans taken out for postgraduate study."}],[{"start":315.4,"text":"Despite concern over loans, a record number of students will start university this autumn, with acceptances at more selective universities rising fastest in this year’s A-level results."}],[{"start":326.4,"text":"Hillman said: “The story about student loans is a story about 30-something professionals. We’ve had three months of horror stories about student loans and demand for higher education is up not down. It has no bearing on 18-year-olds.”"}],[{"start":339.2,"text":"Vivienne Stern, chief executive of Universities UK, the lobby group, said: “Studying for a degree is an investment. For the majority of graduates it pays off through higher average earnings, reduced likelihood of unemployment and a wider range of opportunities."}],[{"start":354.52,"text":"“While the investment is significant, the loan system means you only pay when you are earning, and at a rate that is designed to be affordable,” she added."}],[{"start":362.36,"text":"The Department for Education said: “We know the student loan system we inherited is broken and unfair, and some graduates feel the weight of this more strongly. We will continue to look for ways to make the system fairer for students, graduates and taxpayers in a financially sustainable way.”"}],[{"start":378.32,"text":"Data visualisation by Martin Stabe"}],[{"start":385.44,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1787555390_9603.mp3"}