This statistical publication provides forecasts for higher education and further education student loans in England. These include forecasts of student numbers, student loan outlay and student loan repayments. Only income-contingent student loans issued to students through Student Finance England are included. The forecasts are based on models developed by the Department for Education (DfE); details of quality and methodology are provided in the methodology document accompanying this publication.
This is the latest in an annual series of statistical publications on student loan forecasts. It covers forecasts produced in April 2025, primarily covering the period from the 2024-25 to 2029-30 financial years.
We welcome feedback on this publication and the forecasts presented within it at he.modelling@education.gov.uk.
Full-time undergraduate higher education borrowers starting in the 2024/25 academic year are expected to borrow on average £44,690 over the course of their studies. Most borrowers will repay at least some of their loan. The income contingent nature of the loans means some are not expected to fully repay: 56% of full-time undergraduate higher education borrowers starting a course in the 2024/25 academic year are expected to repay their loan in full.
In total £20.7 billion was issued in the 2024-25 financial year, as published by the Student Loans Company. This was composed of: 46% Plan 2 full-time higher education loans, 48% Plan 5 full-time higher education loans, 3% Master’s loans, 1% Plan 2 part-time higher education loans, 1% Plan 5 part-time higher education loans, <1% Advanced Learner loans, <1% Doctoral loans.
Total student loan outlay is forecast to increase by 26% between the 2024-25 and 2029-30 financial years to £26.0 billion in nominal terms. This is mainly driven by increases in full-time undergraduate higher education loan outlay, partly reflecting increases in average loan amounts (forecast to rise by 15% between the 2024/25 and 2029/30 academic years) and a forecast increase in the number of loan-borrowing entrants over the same period.
Total undergraduate loan-borrowing entrants are expected to grow by 10% over the forecast period, from 512,000 in the 2023/24 academic year to 563,000 in 2029/30. This is largely driven by the projected growth of England’s 18-year-old population across the forecast period, and the expectation that the percentage of this population taking higher education courses will also gradually increase.
As loan repayments depend on borrowers’ income and borrowers are only liable to repay for a fixed number of years, Government does not expect all loans to be repaid in full and expects to subsidise a proportion of student loans.
Of the loan outlay issued in the 2024-25 financial year, the government is forecast to subsidise:
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This statistical publication provides forecasts for higher education and further education student loans in England. These include forecasts of student loan borrower entrant numbers, student loan outlay and student loan repayments.
The forecasts are based on models developed by the Department for Education (DfE). Details of quality and methodology are provided in the methodology document accompanying this publication.
The average forecast loan outlay per undergraduate borrower per year is displayed in Table 1.1. Higher education full-time undergraduate students are forecast to borrow on average £15,450 in the 2024/25 academic year. Students may take out a tuition fee loan, a maintenance loan or both. On average, for full-time undergraduate students, £8,770 is borrowed in tuition fee loans and £7,770 in maintenance loans. In future years, the amount borrowed for higher education undergraduate loans is expected to rise in line with OBR forecast RPIX figures for the first quarter of the calendar year after the start of the academic year. Maximum fees for the 2025/26 academic year are set to increase by 3.1%.
By the 2029/30 academic year higher education full-time students’ average borrowing per year is expected to rise to £17,830 (up 15% on 2024/25), which is driven by an increase in both average maintenance loans (up 14% on 2024/25, to £8,860) and average tuition fee loans (up 15% on 2024/25, to £10,120).
Higher education students studying part-time are expected to borrow on average £4,590 in the 2024/25 academic year and this is expected to rise by 19% to £5,460 in the 2029/30 academic year. The average undergraduate part-time fee loan is forecast to be £4,150 in the 2024/25 academic year; tuition fees for part-time study are generally lower than for full-time study, resulting in lower tuition fee loans. The average part-time maintenance loan is forecast to be £5,460. Unlike full-time undergraduate borrowers, the majority of part-time borrowers only take out tuition fee loans, which is why the average total part-time loan is only slightly higher than the average fee loan.
Undergraduate students often take out loans for several years, usually related to the length of their course. The average full-time undergraduate borrower will take out 3 years of student loans, as shown in 'Table 14: Average length of funding per higher education undergraduate student’ which can be found in the ‘Explore data and files’ section of this release. Higher education full-time undergraduate students starting in the 2024/25 academic year are forecast to borrow on average £44,690 over the course of their studies, as displayed in Table 1.3. This rises to £50,780 for those starting in 2029/30 due to the expected increases in maximum tuition fees from 2025/26 onwards and expected rise in maintenance loan caps in line with forecast inflation.
Just over half of part-time undergraduate higher education borrowers are expected to take out a loan only in one year, with a further 15% taking out two years of loans and 12% taking out three years of loans. Part-time undergraduate students starting in the 2024/25 academic year will borrow £11,570 on average over the course of their studies. This rises to £13,180 for students starting in 2029/30. The increase is driven by an expected rise in tuition fee loans and, to a smaller degree, by the annual uprating of maintenance loans.
The amount borrowed varies depending on the number of years students take out funding for. Higher education students starting in the 2024/25 academic year and taking funding for 2 years of full-time study are expected to take out £31,980 on average while full-time students taking funding for 4 years are expected to borrow £64,210. Part-time students starting in the 2024/25 academic year and taking funding for 2 years of study are expected to borrow £9,590 on average, while those taking funding for 4 years are expected to borrow £19,230 on average.
Students accrue interest on their loans whilst in study. For undergraduate students, the interest rate during study usually varies depending on their plan type. The final loan balance when students enter repayment will be higher than the total loan amount borrowed.
Statutory Repayment Due Date (SRDD
The point a borrower becomes liable to begin repaying a loan, normally the start of the tax year (6 April) after graduating or otherwise leaving their course. After the SRDD borrowers are required to make repayments if their income is above the repayment threshold.
On average undergraduate higher education borrowers starting their studies in academic year 2024/25 are forecast to enter repayment with an average debt of £45,600, equivalent to £38,700 in financial year 2024-25 prices. This debt is composed of loan outlay borrowed and interest accumulated during study. Over the course of their loan term they are expected to repay on average 72% of the loan outlay borrowed (in real terms), at a total of £28,000 in repayments in financial year 2024-25 prices. The median undergraduate loan borrower starting study in academic year 2024/25 is expected to repay their loan debt in full in 31 years.
As student loan repayments are income contingent the amount of loan debt repaid varies with earnings. How repayment varies can be explored through grouping student loan borrowers into ten equal sized groups depending on their forecast lifetime income known as Lifetime Earnings Deciles. These deciles take into account factors such as career breaks and early retirement.
Among borrowers starting study in the 2024/25 academic year, those forecast to have lower lifetime earnings repay considerably less than average. Those individuals in decile 1, who earn less than 90% of other loan borrowers over their lifetime, are estimated to repay £3,900 in financial year 2024-25 prices, which is 10% of loan outlay borrowed. Higher lifetime earnings deciles repay substantially more than average. The highest 10% of lifetime earners, decile 10, will have average lifetime repayments of £42,200 in financial year 2024-25 prices.
Those in the top deciles of lifetime earners, deciles 8, 9 and 10, are expected to repay their loans in full, in under the 40 year term. All repay roughly what they borrowed in real terms because interest on Plan 5 loans is charged at the level of inflation (RPI) with a slight lag. Previous cohorts on Plan 2 loans were charged interest above RPI so could repay more than 100% of their loan in real terms.
These deciles do not align with earnings deciles for the population in general. On average graduates have higher earnings than non-graduates, therefore the lowest 10% of lifetime earners amongst loan borrowers are likely to have higher average lifetime earnings than the lowest 10% of lifetime earners among the general population.
The proportion of loan outlay repaid in real terms, in Table 2.1, is not calculated in the same way as the loan subsidy by government in each financial year. Loan outlay repaid in real terms considers the total amount of borrowing undertaken by students starting their course in the same year, a single cohort. This differs from the section ‘Student loan costs to government: Cost to taxpayer’ which covers loan subsidy where loans are presented by financial year and instead include student borrowers across multiple years.
Undergraduate borrowers starting their studies in the 2023/24 academic year have taken out loans under different repayment terms, known as Plan 5, compared to those who started in 2022/23 who repay under Plan 2. The different terms are:
The forecast lifetime repayment behaviour for the final Plan 2 cohort starting in 2022/23 was presented in Table 2.1 of the 2023 publication, alongside the 2023 forecast for the 2023/24 cohort (in 22-23 prices) in Table 2.2. Student loan forecasts for England, Financial year 2022-23 - Explore education statistics - GOV.UK
Unlike borrowers in the 2022/23 academic year cohort and previous, the 2024/25 cohort are not expected to repay substantially more than they borrowed in real terms. This is because Plan 5 loans accrue interest at a rate linked to inflation. Currently the highest earners who repay their loan in full may pay marginally more than they borrowed in real terms. This is because loan interest is assumed to be based on a lagged measure of inflation, in line with real-world policy, which is out of sync with in-year inflation used for converting to 2024-25 prices. Interest rates for the 2025/26 academic year have not yet been announced, and depending on the interest rate set, these borrowers may see the opposite effect of never repaying more than they borrowed in real terms. Interest rate caps based on prevailing market loan rates may also depress interest rates further for these borrowers, though these are not applicable in the 2024-25 academic year.
The number of undergraduate loan-borrowing entrants is forecast to grow over the upcoming years. This is largely driven by projected growth in the population and in the participation rate of 18-year-olds, who make up around 50% of students entering higher education each year.
Total undergraduate loan-borrowing entrants are expected to grow by 10% over the forecast period, from 512,000 in the 2023/24 academic year to 563,000 in the 2029/30 academic year. Postgraduate loan borrowing entrants are forecast to decrease from 63,000 in the 2023/24 academic year to 59,000 in the 2029/30 academic year. The decrease is driven by the combined effect of a zero-growth expectation in English domiciled postgraduate borrowers and the expiration of the EU pre-settled status, preventing the enrolment of new students from this group in the future.
Table 3.1 shows the forecast number of student entrants receiving loans per academic year, from 2024/25 to 2029/30; the 2023/24 figures can be found in ‘Table 2a: Forecast number of students receiving loans, by loan product’ in the ‘Explore data and files’ section of the release.
Total student loan outlay is forecast to increase from £20.7 billion in the 2024-25 financial year to £26.0 billion in 2029-30 in nominal terms.
No Plan 1 loan outlay is forecast as these loans are only available to students who started their courses prior to September 2012.
The annual growth of entrant borrowers and the rise in average loan amounts due to annual loan uprating drive the increase of higher education full-time undergraduate outlay from £19.5 billion in the 2024-25 financial year to £24.7 billion in 2029-30. Students entering study from the 2023/24 academic year onwards will repay the loans they borrow under Plan 5 repayment terms. In the 2024-25 financial year, 51% of higher education full-time undergraduate outlay was borrowed under Plan 5 repayment terms, expected to rise to over 99.9% of higher education full-time undergraduate outlay in 2029-30.
Plan 3 postgraduate loan outlay is forecast to increase from £755 million in the 2024-25 financial year to £790 million in 2029-30.
Additional information on historic student loan outlay is published in ‘Table 1: Historical student loan outlay and forecast student loan outlay, by loan product’ and can be found in the ‘Explore data and files’ section of the release.
As student loan repayments are income contingent, Government expects to subsidise a proportion of student loans. The RAB (Resource, Accounting and Budgeting) charge is the estimated cost to Government of providing a subsidy for the student finance system. It is the proportion of loan outlay issued each year which is not expected to be repaid, when future repayments are valued in present terms using the HMT discount rate. For more information about the HMT discount rate, see the methodology document.
For example, the Plan 5 full-time higher education RAB charge in the 2029-30 financial year is forecast to be 30%, meaning that 30% of loan outlay issued for full-time higher education study under Plan 5 repayment terms in the 2029-30 financial year is not expected to be repaid.
Positive RAB charges reflect the fact that while most borrowers will repay at least some of their loan, not all borrowers are expected to repay in full. This is because initial loan balances are large, borrowers are only required to make repayments above a set threshold, and unpaid balances are cancelled after 30 years for Plan 2 and Plan 3 loans, and 40 years for Plan 5 loans.
The RAB charge for Plan 2 full-time higher education loans is 32% in the 2024-25 financial year. Changes to Plan 2 repayment terms, announced (opens in a new tab) in February 2022, maintained the Plan 2 repayment threshold at £27,295 up to the 2024-25 financial year, and changed the repayment threshold in financial year 2025-26 onwards to link to inflation rather than earnings growth. For 2025-26, the Plan 2 repayment threshold has been set at £28,470 and updated figures can be found on gov.uk (opens in a new tab).
From the 2023/24 academic year undergraduate loans, for new loan borrowers, are issued under Plan 5 repayment terms. Students who started their course before 2023/24 will continue to receive loans on Plan 2 terms. Plan 5 RAB charges are generally lower than those for Plan 2. This reflects that loans issued under Plan 5 have longer repayment terms and lower repayment thresholds, and therefore a lower proportion of the outlay issued is expected not to be repaid in present terms. This is balanced to an extent by lower interest charged on Plan 5 loans.
Part-time students generally take out smaller total loans than full-time students, but are a very different demographic mix to full-time students. The forecast RAB charge in the 2029-30 financial year for Plan 5 part-time students is 32%.
Since the last publication, there have been revisions to the data, economic assumptions, policies and modelling methodology used within the student loan repayment and earnings models. These updates all contribute, to varying degrees, to any changes over time in the forecast of figures such as RAB charge, stock charge and percentage of borrowers expected to fully repay their student loans. Current assumptions about the future student finance system are set out in the methodology document in the student loans earnings and repayments model chapter, while the assumptions about future tuition fee and maintenance loans are covered in the student loan outlay chapter. Sensitivity to economic assumptions is explored in the methodology document.
Transfer Proportion
Under the partitioned loan transfer approach (opens in a new tab), student loan outlay is partitioned into loaned and transferred funds. Conceptually, the transfer proportion is the fraction of student loan outlay identified at loan inception as government expenditure, in recognition that this portion of the loan is unlikely to be repaid. The transfer proportion is used in the Office for National Statistics (ONS) public sector finance statistics.
The transfer proportion differs from the RAB charge in the way future repayments are discounted to present values. The discounting of future repayments used for calculating the transfer proportion is based on the individual borrower’s interest rates, which vary across different loan products and even for different borrowers under the same plan type, rather than the HMT discount rate. This is why the transfer proportion can be lower or higher than the RAB charge for different loan products. This reflects the different use of the transfer proportion and RAB charges in government finances. Further information is available in the ONS discussion on the alternative valuations of future repayments (opens in a new tab).
Like the RAB charge, the transfer proportion is relatively stable across the forecast period. The forecast transfer proportion for Plan 5 full-time loans in the 2029-30 financial year is 29%, meaning that 29% of loan outlay issued under Plan 5 terms in 2029-30 is identified at loan inception as government expenditure.
Whilst most borrowers are expected to repay their loan in full, some are not expected to repay fully.
Undergraduate borrowers starting their studies in the 2023/24 academic year will take out loans under Plan 5 repayment terms, compared to those starting in 2022/23 who repay under Plan 2. Table 4.3 shows the proportion of students starting study in the 2022/23, 2023/24, 2024/25 and 2025/26 academic years that are forecast to fully repay their loans.
Plan 5 borrowers have a maximum repayment term of 40 years, compared to 30 years for borrowers under Plan 2. 56% of full-time higher education borrowers in the 2023/24 and 2024/25 academic years starting cohorts are expected to repay their loans in full. Of the remaining 44% of this cohort, the majority are expected to repay some of their loans, with some almost fully repaying over the 40-year repayment term. This is an increase from borrowers who started in the 2022/23 academic year under Plan 2, 32% of whom were expected to repay their loans in full, from last 2022/23 forecast and none from year’s forecast.
Despite the 0% RAB charge, around 21% of Master’s loan borrowers are expected not to fully repay their loan during their 30-year repayment term. In addition, these borrowers have interest rates fixed at RPI+3%. This may mean that the discounted repayments of some borrowers meet or exceed the total outlay provided, but do not fully pay off the interest accrued on the loan before the end of the repayment term.
Figure 5.1 shows the forecast outstanding student loan balance through to the 2073-74 financial year. The outstanding balance on student loans is anticipated to reach a peak of around £492.2 billion in 2024-25 prices in the mid 2040s, at around the time that the first few cohorts of Plan 2 loan borrowers reach the end of their 30 year repayment terms and have any remaining loan balance cancelled. At this time, the nominal face value of the student loans would be approximately £862.9 billion. These projections are intended to give an indication of how the outstanding balance of student loans could grow if current policies and trends continue, but are inherently very uncertain given the length of time they project into the future.
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