The changes brought in by the Coalition government in 2010 initially helped to take the pressure off the lowest earning graduates, but replacing maintenance grants with loans means the poorest students are graduating with the highest debt levels of more than £57,000.
Before 2012, fees were £3,000 a year and graduates repaid the debt at a rate of 9 per cent of their earnings over £17,775.
Now fees are more than £9,000 a year, but in return graduates only repay over a higher wage threshold of £21,000.
Monthly repayments from the lowest-earning third of graduates have rocketed by about 30 per cent since 2012, while repayments by the richest third rose by less than 10 per cent.
The report states: “The combination of high fees and large maintenance loans contributes to English graduates having the highest student debts in the developed world.”
Under the new system, 77.4 per cent of graduates will never fully repay their debts, compared to 41.5 per cent of graduates under the previous system.
The IFS concluded that the debt shouldered by students is now “considerably greater”, which carries a risky knock-on effect of putting off prospective students from applying for university in the first place.
So should you pay off your student loan in one large payment if you can?
Currently, students are able to pay your loan off in one lump sum, and won't be charged anything for doing so.
However, many experts actually recommend not paying off your student loans early.
If you're on a graduate wage, the amount of interest you pay on a student loan is often less than the amount of interest you can gain from putting your money in a savings account.
So rather than paying it off, you'd be better to put your money in an ISA.
If you've got a middle income graduate job at £30-40,000, and you're thinking of getting a mortgage or buying a car, you'd be better to use that money on a deposit rather than paying off your loan.
If you've decided to pay off your student loan, you may then need to get another loan to pay for the house and car - and commercial loans come with much higher interest rates than student loans.
Essentially, it will end up costing you more in the long run.
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