Student debt soars to £18bn

They take out bigger loans than ever as £3,000-a-year top-up tuition fees push up the estimated cost of doing a degree to more than £33,500.

Students borrowed more than £3billion during the last financial year - up from £941million in 1997, Student Loans Company figures reveal.

Nearly £400million was needed to cover £3,000-a-year fees - the sum charged at most universities.

Total outstanding debt - the amount owed by graduates still paying back their loans as well as current undergraduates - stands at £18.125billion. Critics of

top-up fees claimed graduates face a debt millstone.

The National Union of Students believes 'typical' graduate debt could be as high as £30,000.

The Government has estimated debt could rise under the new fee regime to £15,000, against around £8,500 currently.

But this estimate is confined to debt owed to the Treasury, whose loans to students are subsidised at zero rates of interest.

Average student debt when Labour came to power in 1997 was less than £5,000.

Students can borrow £7,405 each year from the Student Loans Company. This breaks down into a £3,000 tuition fee loan and a £4,405 living expenses loan. But many supplement their Government loans by taking out overdrafts or loans on credit cards.

Tuition fee reforms raised charges last autumn from £1,175 a year. No student has to pay fees at the start of the courses and can wait until they earn £15,000 to repay zero-interest rate loans to cover the charges.

Liberal Democrat education spokesman Sarah Teather said the total debt is bigger than Slovenia's gross domestic product.

But Higher Education Minister Bill Rammell said: "Student loans are the safest and most effective way of financing education, and the general picture is that students are borrowing within the amount to which they are entitled, not beyond their means."