Student loans system in a right palaver

23 July 2014

student MPs are calling for an urgent review of the student loans system, after it transpired that 45% of student loans will never be repaid.

It's estimated that 45p in every pound shelled, the taxpayer won't ever get back.

Under the current system, students can borrow to cover the full cost of £9,000-a-year tuition fees, and do not have to start paying back their loans until they have finished studying and are earning above £21,000 a year, and any outstanding debt is written off after 30 years.

However the sheer amount of students defaulting on their debt (ie: they haven't got jobs or even if they have, they're not paying enough), and the system looks in crisis as it will soon become financially unviable.

Originally, the government has projected that 28% of loans would have to be written off, but ministers have been continually shouting "HIGHER!"

The number has been revised because economists have downgraded their predictions of how much graduates are likely to earn in the future.

The National Audit Office predicts that student debt will increase from £46 billion in 2013 to about £330 billion by 2044.

Meanwhile, the Student Loans Company is supposed to have 98.5 per cent of borrowers in a repayment channel - which means they are either repaying on time or not earning enough to repay, but they're allowed to include people in that total, even if they don't have any information on them.

The Institute of Fiscal Studies has predicted that the average student will now leave university with about £44,000 of debt, in 2014 prices, compared to about £25,000 under the old system.

Although the lowest earners will pay back less, far fewer graduates will pay off their debt in full by the age of 40, and almost three quarters will never earn enough to pay back their loans in full.

Tuition fees are higher in England than in any other public university system on Earth, and when you throw in other expenses, the cost of studenting in England in general was the third highest in the world.

THE WORLD!

1 comment

  • Slacker
    Yeah! I'll be 50 next year and ALL my student loans will be written off! Fuck you SLC :)

What do you think?

Connect with Facebook, Twitter, or just enter your email to sign in and comment.

Your comment