Total student debt set to escalate to £70bn

It’s been revealed that the total student debt in the UK is set to fluctuate to a staggering £70bn as ministers underestimated the impact of allowing universities to treble their tuition fees.

The number of Universities which have opted to charge the maximum tuition fee is treble the estimated figure, drawing severe concern that the hikes could cripple graduates financially for the rest of their lives.

According to the Daily Mail ministers at the Department of Business, Innovation and Skills had assumed Universities would charge an average of £7,500 a year for tuition fees despite being given the freedom to charge £9,000. Unsurprisingly, the majority of UK institutions have hiked their fees to the maximum.

Margaret Hodge, the Labour MP who chairs the Public Accounts Committee, said: ‘Higher than forecast fees will increase the financial pressures on students. The balance of loans outstanding could rise from about £24bn currently, to around £70bn by 2015-2016’.

MPs have found that in four years alone student debt will rise from the current £24bn to a staggering £70bn. The total equates to an average of £50,000 per student, which puts graduates at risk of being denied loans later in life.
The debt could make mortgages unattainable, and prohibit them from getting a pension.

This recent debt figure draws concern for many institutions as well as graduates, a report has found that seven, currently unnamed, institutions are on ‘at risk register’ compiled by the Higher Education Funding Council for England.

This is money reported that Aaron Porter, president of the National Union of Students, said: “Nick Clegg said before the last general election that we cannot build a future on debt but the changes he championed mean that the amount that graduates are in debt to their government could almost treble in just over four years, hindering their chances to borrow for other purposes, to save for their futures or even for a pension.”

The unmanageable levels of debt, which are substantially higher than anticipated puts both students and institutions at serious financial risk.

Gareth Thomas, Labour’s universities spokesman, said: ‘The Public Accounts Committee have confirmed the Government’s sums could be wrong by several hundreds of millions of pounds and that the next generation of students are facing a £70bm debt bill to pay for the unfair and unnecessary decision to treble tuition fees. This is the latest independent report to call the Government’s plans into question. David Cameron and David Willetts need to use the coming white paper on the future of higher education to signal a substantial rethink’.

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