Many recent graduates aren't earning enough to pay the debts off, the Liberal Democrats have shown.
Student loans are remaining unpaid by many recent graduates, the government has said.
According to new official figures around one-third of students who have left university since the loans were introduced in 1998 are not yet making repayments, the Guardian reports. This is because the group - numbering around 400,000 people - are not earning enough money for automatic student loan payments to be levied from their paycheques.
The threshold for the payments to be taken stands at salaries of £15,000 a year. The number of people who earn less than this amount is predicted to rise in the immediate future, as the worsening credit crunch limits graduates' job prospects.
Student loans were criticised by Wes Streeting, president of the National Union of Students, who said that the 4.8 percent now added to the loans per year to offset inflation made a "myth" of claims that they were cheap to pay back.
The government figures originally came to light following a question in parliament from the Liberal Democrats.
Stephen Williams, Lib Dem spokesman for universities, said: "As the financial crisis worsens the burden on new graduates is going to be even greater."
