The government has ignored calls from MPs to hold an “urgent” review of the current student loans system, calling the demand unnecessary. Current predictions indicate that the student finance system will hold £330bn in loan debts in 30 years’ time.
While the government claims that there is “no immediate pressure” on the system, the Commons Business, Innovation and Skill (BI) Committee have highlighted that the viability of the UK’s loan system was reaching a “tipping point” and called the government’s refusal to review the system “alarming”.
In response to the report, the government stated: “The government has no current plans to initiate a formal review of the sustainability of the student loans system in England.
“Indeed the OECD’s director for education and skills, Andreas Schleicher, considers that we are the first European country to have established a sustainable higher education system. The government is committed to supporting the growth of high quality HE provision in England, ensuring it remains free at the point of access”.
Labour MP and Chairman of the BIS Committee, Adrian Bailey stated: “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”.
The National Union for Students (NUS) have also made their criticism of the government’s response know, highlighting that the government’s decision to ignore the report highlighted signs of “worrying complacency”.
The union went on to add: “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.
“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%”.