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| Student loans: hundreds of millions of pounds unaccounted for | Student loans: hundreds of millions of pounds unaccounted for |
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| Hundreds of millions of pounds of public money paid out in student loans is unaccounted for because the government does not have enough information about the recipients, a report by the spending watchdog suggests. | Hundreds of millions of pounds of public money paid out in student loans is unaccounted for because the government does not have enough information about the recipients, a report by the spending watchdog suggests. |
| The National Audit Office has found that the Department for Business, Innovation and Skills (BIS) does not have employment records for around 368,000 students and former students who took out loans under the scheme. | The National Audit Office has found that the Department for Business, Innovation and Skills (BIS) does not have employment records for around 368,000 students and former students who took out loans under the scheme. |
| This could be because they are unemployed students living in the UK, EU students who have returned home or UK students who have moved overseas, a report has found. | This could be because they are unemployed students living in the UK, EU students who have returned home or UK students who have moved overseas, a report has found. |
| It means that the government does not have enough information to decide whether these students should be making repayments on their loans, and if so, how much. | It means that the government does not have enough information to decide whether these students should be making repayments on their loans, and if so, how much. |
| In its report, the NAO also said that BIS "consistently over-forecasts how much it expects to collect annually by around 8%." | In its report, the NAO also said that BIS "consistently over-forecasts how much it expects to collect annually by around 8%." |
| Using that percentage figure, House of Commons library research has found that the department would be left struggling to cover an extra £600m expenditure from 2015/16. | Using that percentage figure, House of Commons library research has found that the department would be left struggling to cover an extra £600m expenditure from 2015/16. |
| Under the current system, students only repay their loans when they are earning a certain salary – now set at £21,000 – and repayments are linked to their earnings. | Under the current system, students only repay their loans when they are earning a certain salary – now set at £21,000 – and repayments are linked to their earnings. |
| The watchdog warns that the BIS has not done enough to establish whether borrowers with no current employment record are earning enough to repay their loans. | The watchdog warns that the BIS has not done enough to establish whether borrowers with no current employment record are earning enough to repay their loans. |
| While many of borrowers may not be in work, BIS, and the Student Loans Company (SLC) which helps collect payments, have carried out little analysis on how many may be working overseas, or the repayments that may have been missed, the NAO said. It calls on the government to improve the information they have on students who have taken out loans. | While many of borrowers may not be in work, BIS, and the Student Loans Company (SLC) which helps collect payments, have carried out little analysis on how many may be working overseas, or the repayments that may have been missed, the NAO said. It calls on the government to improve the information they have on students who have taken out loans. |
| The report also says that in March, there were 157,000 people who had had no employment record for over a year. While the SLC writes to them at least once a year, it takes limited further action because it does not think this would be cost-effective. | The report also says that in March, there were 157,000 people who had had no employment record for over a year. While the SLC writes to them at least once a year, it takes limited further action because it does not think this would be cost-effective. |
| The NAO, which is independent of government, notes that there are around 14,000 former students, with a total debt of £100m, living overseas who are behind on their repayments. | The NAO, which is independent of government, notes that there are around 14,000 former students, with a total debt of £100m, living overseas who are behind on their repayments. |
| While this is a small group compared to the total number of people with student loans, the SLC could take a "more targeted approach" to collecting in these areas, the report said. | While this is a small group compared to the total number of people with student loans, the SLC could take a "more targeted approach" to collecting in these areas, the report said. |
| The NAO's study says that BIS has forecast that the total value of outstanding student loans will quadruple from £46bn to around £200bn by 2042 at today's prices. | The NAO's study says that BIS has forecast that the total value of outstanding student loans will quadruple from £46bn to around £200bn by 2042 at today's prices. |
| At the same time, the number of borrowers due to repay is estimated to rise from 3 million in 2012/13 to 6.5 million in 2042. | At the same time, the number of borrowers due to repay is estimated to rise from 3 million in 2012/13 to 6.5 million in 2042. |
| More than a third (35%) of new loans taken out are not expected to be repaid, according to government figures, and around half of students are not expected to fully repay their debt. | More than a third (35%) of new loans taken out are not expected to be repaid, according to government figures, and around half of students are not expected to fully repay their debt. |
| Under a major overhaul of higher education funding, which saw tuition fees at English universities treble to a maximum of £9,000, student loans are now written off after 30 years. | Under a major overhaul of higher education funding, which saw tuition fees at English universities treble to a maximum of £9,000, student loans are now written off after 30 years. |
| On Monday, the government announced plans to sell off £900m of debt on loans taken out by students, mainly from the 1990s. | On Monday, the government announced plans to sell off £900m of debt on loans taken out by students, mainly from the 1990s. |
| In all, the Commons library expects there to be a £3bn shortfall over the course of the next parliament between what the department had hoped to recoup from student loan repayments and what it is now likely to get back in loan payments. | In all, the Commons library expects there to be a £3bn shortfall over the course of the next parliament between what the department had hoped to recoup from student loan repayments and what it is now likely to get back in loan payments. |
| Labour's shadow higher education minister, Liam Byrne, who commissioned the extra projections from the library said: "We need to know fast how ministers got it so wrong, and how they're going to fix it without putting the Britain's scientists, students and colleges under threat. This is industrial scale incompetence at the department for industry." | Labour's shadow higher education minister, Liam Byrne, who commissioned the extra projections from the library said: "We need to know fast how ministers got it so wrong, and how they're going to fix it without putting the Britain's scientists, students and colleges under threat. This is industrial scale incompetence at the department for industry." |
| "Worse of all, we may be at the point where so many students loans are being written off, that the government's new student finance system is actually more expensive than the old arrangements, even though the government is asking students for three times as much money. You couldn't make it up," he said. | "Worse of all, we may be at the point where so many students loans are being written off, that the government's new student finance system is actually more expensive than the old arrangements, even though the government is asking students for three times as much money. You couldn't make it up," he said. |
| A BIS spokesman said: "The report demonstrates that there is an effective and efficient process resulting in high collection rates at a low cost which we believe demonstrates good value for money. | A BIS spokesman said: "The report demonstrates that there is an effective and efficient process resulting in high collection rates at a low cost which we believe demonstrates good value for money. |
| "We need to ensure that all borrowers who are earning over the relevant payment threshold are repaying their loans including those who have moved overseas after leaving their course. | "We need to ensure that all borrowers who are earning over the relevant payment threshold are repaying their loans including those who have moved overseas after leaving their course. |
| "We are continually improving the collection process for borrowers and we will carefully consider the NAO's recommendations as part of this programme," he said. | "We are continually improving the collection process for borrowers and we will carefully consider the NAO's recommendations as part of this programme," he said. |
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