Should you make extra payments on your student loan? Data shows uni graduates now leaving with £53,000 debt

• New student loan data shows the average debt faced by some of our most recent graduates has climbed nearly 10% in just one year
• Tuition fee caps are also set to rise for students beginning their studies this year
• Interest on some loans also hit record levels last year
• But official guidance warns paying off your student loan faster might not be the best move for all borrowers

The amount of debt new graduates are leaving university with has shot up over the last year - and it’s expected to keep rising.

The Student Loans Company (SLC) has this week released new figures for the 2024/25 financial year, which showed that recent graduates left university with a loan balance of £53,010 on average. This was a whopping 9.8% increase on the year before, with the new data showing that England’s total outstanding student loan balance now sits at £266.6 billion.

For those who had recently completed their studies, university tuition had likely been capped at £9,250 per year for the duration of their course. Graphs included in the SLC report show that more money was paid out for maintenance loans last year - which helps cover things like living costs.

However, the Government recently raised the cap on fees to £9,535, which will kick in at the start of the 2025/26 academic year. This means how much students need to borrow to cover their tuition is expected to rise too.

With higher loans and steep interest rates accumulating on them from the time you receive your first payment, some borrowers might be considering paying more of it off early. But official guidance warns that might not always be your best option.

So when exactly will you have to start paying your loan back, and should you expedite the process with extra payments? Here’s what the official Government guidance has to say:

When do you have to start paying off your student loan?

When exactly you have to start paying your student loan back depends on how much you’re currently earning - which itself depends on when you finished your studies. You generally don’t have to start making repayments on your student loan until the first April after you either graduate, or leave your course.

For students starting an undergraduate degree this year, you won’t have to start paying off your loan until you’re earning at least £25,000 per year, Government guidance says. Once you do, these payments will be taken out of your salary automatically, and should equal about 9% of the money you earn over that threshold.

If you started your degree between September 2012 and July 2023, the minimum earning threshold before you have to start making repayments is £28,470 for most people.

Your loan will also accumulate interest as soon as your first payment is made. Just how much that will varies year-on-year based on the rate of inflation - although it did climb to a record level as of last year.

Are extra repayments worth it?

According to the Government, you can choose to make extra repayments towards your student loan to try and pay it off faster - on top of any regular payments once you’re earning over the threshold. There’s no penalty if you do opt to make extra repayments.

But the guidance warns that because loans will be written off at the end of the loan term, extra repayments might not necessarily benefit you. “Before you make an extra repayment, check when your loan will be written off,” it advises.

This varies depending on when you finished your studies, but you can find out when that will be online here. For people graduating this year, their loans will expire after 40 years.

“You should speak to a financial adviser if you’re unsure whether you should make extra repayments or not,” the guidance continues. If you decide to make an extra repayment, you can choose how it is applied to your loan. For example, you can use it to reduce the total balance of your loan, or to reduce the balance of a specific plan (if you have more than one).

Repayments can be made online using a debit card, by bank transfer, cheque, or even from overseas - or for someone else’s loan. You can find out more information on all of the different ways you can pay online here.

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