Only One in Four Expected to Pay Back Graduate Loans
Figures from the Department For Business And Innovation have shown that the Government only expects a small proportion of graduates to pay back their student loan in full; which currently is set at £9000 per year for tuition fees. In fact they indicate that only one in four are expected to pay back the loan in full.
Under the new system graduates do not have to pay loans back until they earn £21,000 or more, so most graduates with lower incomes are likely to spend most of their careers servicing the interest on their debts without repaying the loan itself.
This news lead to the shadow cabinet raising concerns about the sustainability of the new system, branding it “unfair” and “unsustainable”. The Coalition of course rejects these claims arguing that it is fairer than the alternative graduate tax with Vince Cable, Liberal Democrat Business Secretary claiming that the majority of students will in fact pay less than students currently studying.
With many of the lower paid graduate positions unlikely to provide enough income to fully service these loans; a shortfall in recruitment in some sectors may arise with lower paid jobs less attractive to graduates burdened with massive debts.
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