Will you repay your student loan?
A spending watchdog has found that the student loans company is not doing enough to recover outstanding student loan debt. The watchdog has accused the government and their student loans […]
A spending watchdog has found that the student loans company is not doing enough to recover outstanding student loan debt.
The watchdog has accused the government and their student loans company of not doing enough to recover lost student loan debt. Student loan debt currently costs the taxpayer £46 billion, and is set to rise to £200 billion in the next thirty years due to the rising costs of a university education.
The government is said to be overly optimistic about loan repayments, with only 28% of debts expected to be written off in 2010, with this figure rising to 35% in 2013, when in reality 40% of loans were written off this year. An increase in fees to up to £9,000 a year means only 50% of students are expected to earn enough after their degrees to fully pay off their loans.
Margaret Hodge, chair of the Commons Public Accounts Committee, notes that the expansion in loans requires a stronger strategy for collecting repayments. Speaking to the BBC, Hodge stated that:
It is essential that the government collects every pound it can of the debt that should be collected”
The NAO report highlights that £5 billion of the debt is owed by 368,000 former students whose whereabouts are unknown – those who are unemployed or have left the country. The report criticises the student loans company, saying more can, and should, be done to recover the outstanding debts from those off the radar. As of March 2013, £100 million was owed in repayments from 14,000 students living abroad.
Do you think the government need to be stricter on student loan repayments? Let us know in the comments below.