Qualified advisers answering your
Financial Questions
call 0800 092 1245

Student loans review rejected by the Government


MPs call for an urgent review of student loans has been rejected by the Government, despite being told the current system is under threat because of a “large potential black hole” in its figures.

The Commons Business, Innovation and Skills (Bis) Committee has predicted that the student finance system will be carrying £330 billion in student loans debt by 2044. Under the current student loan system the government loses around 45p for every £1 it gives out in loans.

The Government has said there is "no immediate pressure" on the system. They believe its finance system is a "long-term investment in the skills of the nation".

Currently students can take out government-funded loans to cover tuition fees, which cost up to £9,000 a year.

Students from England and Wales pay back their tuition fee loans once they earn £21,000 a year; in Northern Ireland, they pay back once they earn £15,795 a year. Scottish students who study in Scotland do not pay tuition fees. If the debt has not been paid back in full in 30 years, it is written off.

The number of graduates failing to pay back student loans is rising dramatically, leading to the Treasry approaching the point in which it will get zero financial reward for tripiling tuition fees to £9,000 a month. The threshold at which experts calculate that the government will lose more money than it would have saved by keeping the old £3,000 tuition fee system is 48.6%.

Chairman of the Bis Committee, MP Adrian Bailey said:
"With the prospect of a large potential black hole in the government's budget figures, it is all the more alarming that the government has refused to conduct a review of the current student loan system.

"A review would offer the opportunity to assess the viability of the existing system before we stumble blindly into an unfunded student loans model which would leave students, universities, and taxpayers with a very raw deal indeed."

Need financial advice?

If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details