{"id":5534,"date":"2018-12-17T11:18:04","date_gmt":"2018-12-17T11:18:04","guid":{"rendered":"http:\/\/www.styledeals.co.uk\/blog\/student-loan-change-adds-12bn-to-deficit\/"},"modified":"2018-12-17T11:18:04","modified_gmt":"2018-12-17T11:18:04","slug":"student-loan-change-adds-12bn-to-deficit","status":"publish","type":"post","link":"https:\/\/www.styledeals.co.uk\/blog\/student-loan-change-adds-12bn-to-deficit\/","title":{"rendered":"Student loan change adds \u00a312bn to deficit"},"content":{"rendered":"\n
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A change in how student loans are recorded in the public finances will add \u00a312bn to the deficit, after a ruling by the Office for National Statistics.<\/p>\n

The amount expected not to be repaid, which could be 45% of lending, will now be reported as public spending.<\/p>\n

This bigger impact on the deficit from student lending could provide an incentive to cut tuition fees.<\/p>\n

It will end what has been called a “financial illusion” in student fees.<\/p>\n

Nick Hillman, director of the Higher Education Policy Institute, said this “180-degree flip” will seem “embarrassing for policymakers”. <\/p>\n

But he warned it could mean less funding for students and universities as they “suddenly look much more costly to current taxpayers”.<\/p>\n

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.<\/p>\n

High fees, high deficit<\/h2>\n

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 \u00a312bn.<\/p>\n

This technical change could have major implications for the current review of university finance in England – which is considering whether to cut fees from \u00a39,250 per year.<\/p>\n

Higher levels of tuition fees require higher levels of lending – which will now show up as billions more on the deficit.<\/p>\n

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This will provide an incentive for the government to reduce the level of tuition fees, allowing them to limit the negative impact on the deficit.<\/p>\n

The change applies to loans to students across the UK, but most of this will be accounted for by lending to students in England.<\/p>\n

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.<\/p>\n

Alistair Jervis, chief executive of Universities UK, warned against “knee-jerk reactions” to the ONS ruling which could cut spending on students or limit student numbers.<\/p>\n

“It is essential that universities are properly and sustainably funded to ensure students receive the high quality university experience they rightly expect,” he said.<\/p>\n<\/p><\/div>\n


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Source<\/a> by [author_name]<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Image copyright Getty Images A change in how student loans are recorded in the public finances will add \u00a312bn 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. This bigger impact on … <\/p>\n","protected":false},"author":0,"featured_media":5535,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5534","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5534","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=5534"}],"version-history":[{"count":0,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5534\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/media\/5535"}],"wp:attachment":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=5534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=5534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=5534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}