Student debt of £5bn unaccounted for as government loses track

Most graduates pay off their loans – but the government has lost track of 368,000
Most graduates pay off their loans – but the government has lost track of 368,000

THE GOVERNMENT is not doing enough to ensure student loans are repaid, the National Audit Office has warned.

Around 368,000 students are unaccounted for by the Department for Business, Innovation and Skills, the spending watchdog has discovered. They collectively owe more than £5bn and may be unemployed or overseas. The NAO reports that 14,000 students are currently living overseas and that they owe around £100m.

The watchdog has also highlighted concerns that BIS is overestimating the amount of money it will recover every year by around eight per cent. It estimates that the total outstanding loan debt of £46bn will rise to £200bn in the next 30 years and that around half of students are not expected to earn enough money to repay in full.

Amyas Morse, head of the NAO, called on the government to” take a more energetic and considered approach to maximising the value of the loan book to the taxpayer and achieving a high level of collection performance”.

A BIS spokesman told the Guardian: “We are continually improving the collection process for borrowers and we will carefully consider the NAO’s recommendations as part of this programme.”

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April 22, 2014, 2:25pm