The National Audit Office (NAO) last month released a report that looked at the BIS’ (department of Business, Innovation and Skills) abilities to manage and regulate students repaying their university loan fees. The report found the BIS to have a less than ‘robust’ system in place for this and until one is installed he department will not ‘be well placed to secure value for money’.
With more money being needed to pay for university admissions, the government’s loan book is becoming a more substantive asset than ever. With hopes to make it more efficient parliament is looking to safely secure funds in a new structure that may not be recouped in the current system. The report states that 2013 saw the amount of outstanding student loans total at £46 Billion and will rise to a huge £200 Billion by 2042 in the current pricing. Such an increase means that the current system will have to evolve to meet the demand for higher education by the futures prospective students. This huge ascension isn’t down to an increase prospective students, with the number of student loans going from 3 million this year to only 6.5 million over the span of 30 years, rather the hike in tuition fees that the current government set about.
Due to so many external factors such as inflation and levels of graduate earnings the NAO cannot produce a target of what they hope to achieve but emphasise that the forecasted level of repayment is consistently higher than the amounts actually collected. One reason they have produced for this is that they are not sure on the number of people who are repaying loans are actually working in the UK, thus making it harder to keep track on their income and other fiscal attributes. Nevertheless the NAO have stated that the BIS ‘needs to make better use of data to support its collection strategy and improve’ otherwise many feel that it won’t be able to maximise the collection value of the loan book.
This feeling is reinforced by the fact that the report estimates that 50% of estimated new borrowers will not be able to fully repay their loan. It’s worrying to think that half of graduates will not be able to pay back their loans fully after receiving a degree, furthering a notion among the youth that University just isn’t worth it these days. All this talk about value for money and yet the students who are being quantified and investigated are the ones who are getting no bang for their buck.
What does this report mean for students though? The NAO haven’t said much on their plans for students but why would they? After parliament’s attack on tuition fees they probably feel safer to make no comment at all on how students may be affected when they have to pay back such huge sums of money.
DISCLAIMER: The articles on our website are not endorsed by, or the opinions of Shout Out UK (SOUK), but exclusively the views of the author.
