Open

Latest news

Explore insightful perspectives and expert advice on finance

Home |Latest news |Cost of student loan system 'has increased by more than £10 billion', IFS finds

Latest news

Browse by category
Business News

Cost of student loan system 'has increased by more than £10 billion', IFS finds

January 11 2024

Research carried out by the Institute for Fiscal Studies (IFS) has revealed that the cost associated with financing the UK's student loan system has increased by more than £10 billion per year.

The IFS attributes the increase to higher interest rates and changes in government borrowing over the past two years.

It said that funding student loans has become 'substantially more expensive' for the government, and its official measures of the cost of student loans do not reflect the increase.

The business group said that if the government can borrow at a lower interest rate than the interest it charges on student loans, then lending money to a student who subsequently repays their loan in full will prove to be a profitable transaction for the government.

In its report, the IFS stated: 'In recent years, the government's borrowing costs have always been lower than the interest rates it charged on student loans. This is now expected to change.

'Yields on gilts (government bonds) have risen substantially over the past two years and are now higher than expected RPI inflation, which will determine the interest rate on newly issued student loans. As a result, as well as making a loss on the loans that are not repaid, the government can now also expect to make a loss on the loans that are.'

Here to help

Please complete the form below and our expert team will be in touch.

  • Contact details

    • *
    • *

  • What services are you interested in?

    • *

  • Message

    • *

  • Which location would you like to contact?

  • Communication

    • *Indicates a required fields.†At least one form of contact is required.

      By submitting this form, you agree that Attwoods can process your information in order to respond to your enquiry. For more information visit our Privacy Policy.

Bromsgrove
Bromsgrove

Attwoods is proudly based in the historic market town of Bromsgrove, Worcestershire

  • 182 Worcester Road
  • Bromsgrove
  • Worcestershire
  • B61 7AZ
Call us01527 874170
Learn more about BromsgroveGet in touch
Evesham
Evesham

Attwoods is proudly based in the picturesque town of Evesham, Worcestershire; nestled in the heart of the Vale of Evesham

  • 90-92 High Street
  • Evesham
  • Worcestershire
  • WR11 4EU
Call us01386 424388
Learn more about EveshamGet in touch
Pershore
Pershore

Attwoods is proudly based in the Georgian market town of Pershore, Worcestershire.

  • Perrott House
  • 17 Bridge Street
  • Pershore
  • Worcestershire
  • WR10 1AJ
Call us01386 554870
Learn more about PershoreGet in touch
  • Xero Logo
  • Gold Partner Logo
  • Sage
  • QuickBooks Platinum

The practices of Attwoods are carried on by Attwoods Accountants Limited, Attwoods Business Services Limited, Attwoods (Bromsgrove) Limited. Regulated for a range of investment business activities by the Association of Chartered Certified Accountants.