This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.bbc.co.uk/news/education-46591500
The article has changed 11 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Student loan change adds £12bn to deficit | Student loan change adds £12bn to deficit |
| (35 minutes later) | |
| A change in how student loans are recorded in the public finances will add £12bn to the deficit, after a ruling by the Office for National Statistics. | A change in how student loans are recorded in the public finances will add £12bn to the deficit, after a ruling by the Office for National Statistics. |
| The amount expected not to be repaid, which could be 45% of lending, will now be reported as public spending. | The amount expected not to be repaid, which could be 45% of lending, will now be reported as public spending. |
| This bigger impact on the deficit from student lending could provide an incentive to cut tuition fees. | This bigger impact on the deficit from student lending could provide an incentive to cut tuition fees. |
| It will end what has been called a "financial illusion" in student fees. | It will end what has been called a "financial illusion" in student fees. |
| The decision by the statistics agency tackles an anomaly in which the cost of lending to students has been missing from the public finances - allowing lending to rise to cover higher fees without any apparent increase in the deficit. | |
| High fees, high deficit | |
| Approaching half of student lending is expected to be written off - and this will now have to be reclassified as spending, which the ONS says will push up the deficit by an anticipated £12bn. | |
| This technical change could have major implications for the current review of university finance in England - which is considering whether to cut fees from £9,250 per year. | |
| Higher levels of tuition fees require higher levels of lending - which will now show up as billions more on the deficit. | |
| This could provide an incentive for the government to reduce the level of tuition fees, which would limit the impact on the deficit. | |
| The change applies to loans to students across the UK, but most of this will be accounted for by lending to students in England. | |
| Much of university funding in England is now through tuition fees - and if fees were cut there would be questions about whether there would be a return to more direct funding. |