Britain’s biggest student loan: One graduate’s debt is worth £40k more than the average home

One graduate has racked up more than £300,000 worth of student loan debt, the highest amount on record.  

As of 23 January 2026, the biggest outstanding student loan repayment was £314,256. Six months earlier, the biggest balance had been £299,645.

It means the largest student debt is worth £40,000 more than the average house price in the UK which currently stands at £271,000 according to the Office for National Statistics.  

That is according to a Freedom of Information request released to comparison website Compare the Market by the Student Loans Company. 

It revealed that eight graduates have loans which are more expensive than the average home, with the second-largest debt sitting at £291,238.

It is not known what degree the students did, or the duration of their studies.

Students on courses with a longer duration, such as medicine which typically takes five years, can accrue huge debts. Those at university in London and students living away from home are also able to borrow more. 

The average loan balance for those who studied in England now sits at £53,010. 

More than 2.8million graduates now have at least £50,000 of outstanding student debt, up from more than 2.6million graduates in August 2025.

More than 5.3million student loans have grown since the borrowers passed their loans’ repayment threshold and started repaying them, according to Compare the Market. This is because interest is being added to graduates’ loans faster than they can pay it off.

Meanwhile, just 1.7million loans have shrunk in size since passing the repayment threshold.

It means that just a quarter of student loans past the repayment threshold have shrunk whilst the vast majority have grown despite graduates continually paying their loans off.  

Due to a snowball effect, bigger loans accrue more interest so graduates must pay even more just to stop the interest from growing without even managing to pay off the principal sum borrowed. 

How do student loan repayments work? 

Graduates who started university between September 2012 and July 2023 – and anyone since then in Wales – are on the Plan 2 repayment scheme. 

Many of the loans currently being paid off are Plan 2 loans. These students were the first cohort to pay £9,000-plus per year in tuition fees, having previously been £3,000 or less. 

Borrowers under the Plan 2 system are charged interest based on the Retail Price Index (RPI) plus an extra amount depending on their earnings.

If you earn less than £28,470 in a year, you make no loan repayments. Repayments are a punitive 9 per cent of any income above this threshold.

Those earning between £28,470 and £51,245 will accrue interest at a rate of 3.2 per cent plus as much as 3 per cent depending on their earnings. Anyone earning more than £51,245 will see their loans balloon at an interest rate of 6.2 per cent this year.

Plan 2 loan holders are the only group with undergraduate loans charged at more than RPI, but there is another sting in the tail for those on Plan 2 loans.

In last November’s Autumn Budget, the Treasury revealed it would freeze the threshold at which English graduates on the Plan 2 scheme must start making student loan repayments.

The threshold is to be increased from its current £28,470 to £29,385 in April – and then frozen until 2030. The policy is set to rake in an extra £400million a year for the Treasury.

Sajni Shah, money expert at Compare the Market, says: ‘It is important for students to stay well-informed about the different types of student loans available to them and how repayments work.’

‘Against a backdrop of climbing student loans, and with the continued rise in living costs making essentials like rent, utility bills and commuting increasingly expensive, careful budgeting is key for graduates starting out in their careers.’