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Outstanding student loan balances to peak at £330billion

June 20, 2014

The government now believes that outstanding student loan balances will peak at £330billion (today’s prices) in the mid-2040s.

The government has revealed new figures in response to a question from Liam Byrne. These show a marked climb from the much-quoted £200billion figure (for a 2042 ‘peak’) emphasised in November’s National Audit Office report: they result from revisions to forecasting and modelling which saw the loss on loans issued in recent years revised upwards to 45% from 35%. (Each percentage point uptick represents the equivalent of £120m in lost future revenue.)

A reminder, you cannot calculate the government’s loss on loans by applying the 45% figure to aggregated outstanding balances. 

 

 

 

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