Students, will you ever pay back your loan?By Editor
Almost 50% of students who take out a student loan will never pay it back, the Business, Innovation and skills Committee (BIS) has warned.
The report which was conducted by the cross-body party found that for every pound loaned out 45p is lost.
Adrian Bailey MP, chair of BIS’ remarked:
“The government’s estimates indicate the size of outstanding student debt will increase to more than £300 billion by 2044”
The Labour MP continued: “The financial funding system for higher education is looking increasingly fragile, coming under the strain of unfunded commitments and poor debt collection.”
Vince Cable has also admitted there are faults in the current system
As such, the committee has called for an urgent review to assess just how much capital will be lost in the long run.
So what does this mean for students? Well, in an attempt to make sure more money is paid back at the current figures, the rate in which a graduate pay back their loans could be intensified. This could also mean an increase in interest, too.
Additionally, those on the post 2012-scheme may have theirs rolled back to the previous rate, where university leavers started to recompense the government after their income was at £15,000 a year.
Worryingly, upon hearing the news, Guardian columnist Damien Walter tweeted: “I suggest getting your Student Loans paid off…this is all about raising the interest rates then privatising the debt.”
But what do you think? Are students in for yet more financial difficulty?