According to Shiv Malik’s article in today’s Guardian, the proportion of unpaid loans is approaching a critical level as write-offs are on track to pass the gains from tripling of fees.
The proportion of graduates failing to pay back student loans is increasing at such a rate that the Treasury is approaching the point at which it will get zero financial reward from the government’s policy of tripling tuition fees to £9,000 a year.
New official forecasts suggest the write-off costs have reached 45% of the £10bn in student loans made each year, all but nullifying any savings to the public purse made following the introduction of the new fee system.
He quotes Andrew McGettigan (citing him as the author of The Great University Gamble: Money, Markets and the Future of Higher Education) as calling for ‘an urgent enquiry’:
“When MPs voted to raise the maximum tuition fee in 2010, the estimated loss on the related student loans was thought to be 30p for each pound issued.
“For that to be revised up to 45p so soon is staggering. When you are issuing £10billion of loans each year, as we are now, that’s an unanticipated, additional loss of £1.5billion per year.
“Any claim to savings from the new regime has disappeared and we now need an urgent inquiry into the whole scheme. Something is seriously awry and we need clarification on what this might mean for other aspects of the higher and further education budgets.”
To read the article in full, go to the Guardian website, here.
To hammer home the urgency of a massive higher education re-think, we’ve decided to give Andrew’s book away at a 30% discount (down to £12), which you can activate by clicking here, or on the banner at the top of the page.