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The government has today published figures for student numbers which forecast the cost of student loans and loan repayment in England
These figures (27 June) show that the taxpayer will cover 45% of the value of student loans in England.
The student loans system was designed around the fact that not all loans would be repaid in full. Loans only begin to be repaid once the graduate earns over £25,725 and have a cut off of 30 years.
Despite the above fact it must be emphasised that student loans have helps many millions of students gain access to university education, including record proportions of disadvantaged 18-year-olds, in turn helping to improve their career prospects.
Approximately 70% of full-time undergraduates enrolling into university in 2018/19 will receive the government contribution which is about 45p in the pound. In total this works out as to £7.4 billion in the financial year 2018-19.
Although £7.4 billon does seem like a large amount one has to consider the value gained by the country in the boost of skilled individuals who will go on to undertake jobs which have significant social importance to the country, we live in.
In a statement from Department of Education they re-enforced the importance of the students loans have to the economy in the long run and that they are significantly different to traditional loans in that student loans do not have to repaid unless the graduate is earning above a certain amount per year and that the loans are written off after 30 years.
The system was deliberately designed so that our education system is accessible to anyone and that the government subsidy of 45% should be seen as an investment in the country’s future.
Although it is incumbent on all universities to deliver courses which are value for money for the students and taxpayers alike.
Student loans can contribute to living costs and tuition fees, which means this subsidy represents a substantial funding stream for university income.
The figures published today are part of the Government’s Resource Accounting and Budgeting (RAB) charge, which outlines the amount of value of student loans written off by the government e.g. when they cannot be repaid by graduates after 30 years.
It was also revealed today that the Master’s loan system does not require any subsidy from the government. A majority of students studying at Master’s level going on to pay back their loans in full.
Overall, it is expected over the five-year period that full-time undergraduate entrants eligible for tuition fee loans, at higher education institutions, are forecast to grow rising to 397,000 in 2023/24. In 2018/19, this figure is estimated to be 384,000.
Debt management agencies are regulated by The Financial Conduct Authority
Many people in the U.K struggle with debts and many do not know how to start to repay them speaking to a debt advisor is one of the best things you will do along with taking action yourself by speaking directly with your creditors.
https://www.nationaldebtline.org/ and https://www.moneyadviceservice.org.uk
You should always seek professional advice when handling debt problems. Cashute are not licensed debt advisers and any information contained in this article should not be taken as legal advice. It is your Responsibility to seek out correct legal advice