Student Loans 'Not Being Repaid'

by Michael Ross
Published on 6 October 2008
Student Loans 'Not Being Repaid'

Many recent graduates aren't earning enough to pay the debts off, the Liberal Democrats have shown.

Student loans are remaining unpaid by many recent graduates, the government has said.

According to new official figures around one-third of students who have left university since the loans were introduced in 1998 are not yet making repayments, the Guardian reports. This is because the group - numbering around 400,000 people - are not earning enough money for automatic student loan payments to be levied from their paycheques.

The threshold for the payments to be taken stands at salaries of £15,000 a year. The number of people who earn less than this amount is predicted to rise in the immediate future, as the worsening credit crunch limits graduates' job prospects.

Student loans were criticised by Wes Streeting, president of the National Union of Students, who said that the 4.8 percent now added to the loans per year to offset inflation made a "myth" of claims that they were cheap to pay back.

The government figures originally came to light following a question in parliament from the Liberal Democrats.

Stephen Williams, Lib Dem spokesman for universities, said: "As the financial crisis worsens the burden on new graduates is going to be even greater."

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Your Comments

Ray
on 22 Feb 2009 08:50
Perhaps Richard (6th Oct 2008) would like jobseekers allowance to be paid back when recipients become employed? Or even re-open the workhouses for the under £15k graduates to generate treadmill electricity. That would also reduce carbon emissions.
 
Richard
on 6 Oct 2008 20:33
Students should be made to pay back loans no matter what they earn, they have had the opportunity to better themselves it's their own fault if they end up no arning over £15000