Revealed: How the cost of a degree is now £100,000

The true cost of a university degree will rocket to up to £100,000 for today's students, The Independent on Sunday can reveal.

Thousands of people currently studying at university will end up paying that amount over their career because of interest charges and other fees – several times the £27,000 or £36,000 in fees that most three- and four-year courses charge.

The landmark figure, revealed in the Government's own documents, is far higher than the £70,000 in repayments that it was previously thought students would end up paying over their lifetimes. The Government figures confirm that graduates who find well-paid jobs – in finance and law, for example – will be able to save tens of thousands of pounds by paying off their loans more quickly than the vast majority of their counterparts on middle incomes.

Even before they started in September, every student was hit with a hidden charge: for repayment purposes, the total cost of tuition is backdated to day one, meaning that the majority of the 300,000 three-year students and 117,000 four-year students currently studying will graduate with an extra £3,300 or £5,000 bill respectively, according to the Department for Business Innovation and Skills (BIS) website. Many students will repay up to four times the cost of their tuition during the 30 years following graduation, after which any remaining debt is written off.

Add in other living costs and average student debt is now predicted to hit £53,000 by graduation. Accountants say billions of pounds of student debt will never be repaid, leaving "a massive tax time bomb" for generations to come.

Based on the Government's figures, almost 300,000 students – 70 per cent of those studying – who started university in the autumn will repay between £65,000 and £85,000, while those in the highest income bracket pay back less because they will start to pay off their debts sooner. About 10 per cent who are in the "squeezed middle" could end up paying back between £85,000 and £100,000. The 20 per cent of graduates with the lowest lifetime earnings (a group dominated by women) will never come close to repaying their fees and the debt will be written off after 30 years.

The Government's own projections lay out details of what students and graduates would owe at the start of each year in interest and repayment charges. What graduates pay back each month depends on their earnings: 9 per cent of income above £21,000 a year, independent of both the interest rate and the size of the loan. The amount due increases with time because interest is added. A 28-year-old male beginning a three-year course and whose starting salary of £21,000 quickly rises to £60,000 in year four, and is a six-figure salary by year 15, will settle his bill in 13 years, repaying just over £42,000. A woman who earns less than a third of that in her lifetime and who begins work a few years after graduating repays almost £62,000 over 28 years. A woman in her twenties who earns less than £1m in her career and takes time out to have a family will pay back less than £20,000, leaving an unpaid debt of almost £60,000. Scottish students in Scotland have their fees paid, while students in Northern Ireland pay a maximum £3,575 a year tuition.

Peter West, financial director at Portal, a computer company in Bracknell, Berkshire, said: "No one is aware of the long-term implications of this accounting wheeze. Higher education reform is a victimless crime and a massive tax time bomb. The Government has simply shifted all the debt off the accounting sheet for now – but, my God, will it come back and hit us in 30 years' time."

Susan Cooper, professor of experimental physics from the University of Oxford, said: "If the £21,000 repayment threshold doesn't increase with inflation, the requirement for repayment can become much more onerous over the 30-year period. And maybe the 30 years could be increased as well. The higher the costs, the more the Government has to write off 30 years later. One could have wished for a more thorough thinking through of the consequences before being launched into this experiment."

The University and College Union general secretary, Sally Hunt, said: "The Government rushed through higher fees without properly considering the financial consequences. We warned at the time that fees close to £9,000 a year would be the norm and that the calculations for repayment by graduates were flawed."

A spokesperson for BIS said: "Extending the write-off period to 30 years was fully costed as part of the whole repayment system. The new system helps reduce the deficit, is affordable and sustainable for the Government, while offering protection for those who may not go on to high-paid employment."

Chuka Umunna, Labour business spokesman, said: "Students will never forgive this government for hiking up the costs of going to university. This figures show that, as ever, it is middle- and lower-income families who are being hit hardest."

The NUS president, Liam Burns, added: "It is shocking that politicians treat the potential of a generation before they have even started their working career with such nonchalance."

Case study

Tamara Hassan, 19, was put off by soaring student debt. Earlier this year, she completed her A-levels at Epping Forest College and began looking at university psychology courses...

"The trebling of the fees was a large part of not wanting to go in the end," she said. "By the time I came out of university, I would be in so much debt without any work experience and looking for a job that might have nothing to do with my degree, so I started looking at apprenticeships instead. One of my brothers went to university before the fees were trebled, and it took him five years to get a job and he's still paying back his debt. Another brother didn't go and he has the best job of all of us so I just wanted to start working."

Tamara now works in customer services at the Not Going to Uni website, a resource for school leavers. There has been a 60 per cent rise in apprenticeship applications via the website since the Government's reform of higher education.