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Report warns student debt write off costs will be higher than government estimates

14 February 2014

The amount of student debt that will have to be written off has been severely underestimated warns a report from an influential group of MPs released today.

The report, from the Public Accounts Committee, warns that the government has repeatedly overestimated what students will pay back, leaving the taxpayer with a much higher bill for stumping covering the cost of their fees.
The government originally thought that less than 30% of student loans would never be repaid. Its most recent assessment suggests that around 40% of loans will never be repaid.
Recent research has warned that not only will the new funding arrangements for student loans prove much more expensive than previously thought, but that they may even be more expensive than the arrangements they replaced.
UCU general secretary, Sally Hunt, said: 'Under the coalition's regressive university funding policies people will be saddled with decades of debt, yet billions of pounds will never be paid back and the government has repeatedly failed to predict how much this will cost the public purse.'
'The government rushed through the new system without doing the proper maths. This policy had nothing to do with austerity measures; it was all about ideology and passing the debt for a university education on to students. Amazingly, we may well end up with the taxpayer footing a larger bill for students' education than before students had to pay £9,000 a year fees. It's time for a rethink.'

Last updated: 14 March 2019