DATA just released by the government has shown that officials expect only only 25% of student loan fees to be repaid.
Roughly £17billion is loaned to about 1.3million students in England each year, and total student debt is predicted to hit reach nearly £500billion by the middle of this century.
SR News contacted the Student’s Union at the University of Sunderland to find out their reaction to these latest figures.
Georgios Chnarakis is the SU’s President of Education, and he believes that reform of the loan system is inevitable.
He said: “I believe there are lots of pros and cons to the student loan system and it is likely to be reformed at some point, hence the Auger review.”
The review (named after City banker Philip Augar, who led it) questioned what eduational value for money students were getting for university course fees averaging above £9,000 a year, and recommended limiting fees to £7,500.
Mr Chnarakis said: “When fees were increased in 2012 to £9,250, the policy effectively failed and universities did not use different fees for different courses, most just put the fees to the higher amount to fill gaps in lost finance.
“The Government didn’t really project this in their budgets and, in reality, always lost 75% of student loan funding. The Government now has to show full spending, and this has highlighted the black hole which always existed.”
In 1999 there was only £1.9billion of student debt, which was shared among about 180,000 students: now it’s over £14billion worth of student debt, with 1.1million students making use of the student loan system every year.
The key difference now is that students see their debt wiped out 30 years after completing their degrees if it remains unpaid.
Mr Chnarakis said: “I think the majority of graduates do not worry about the debt, as they know it’ll be impossible for the majority of them to repay it fully.
“They know they owe some money that will be written off after 25 or 30 years of them graduating. In reality, everyone is paying a small amount to study at university.”