Can someone explain something to be about the student loans?

[andrewducker]

There have been a few stories in the newspapers today, centered around the new Student Loans system not bringing in as much money as they hoped, because people aren't paying them back.

But those new student loans would only have been taken out starting in 2011, which means that the first people to have taken them out wouldn't actually have graduated yet, and the chances of many of them earning more than £21k (the lower limit to start paying them back) is extremely low.

So I can't see how the non-repayment issue can have anything to do with the changes.

What am I missing?

Comments

[matgb]

New official forecasts suggest the write-off costs have reached 45% of the £10bn in student loans made each year, all but nullifying any savings to the public purse made following the introduction of the new fee system.

Remember how remarkably sanguine I've been ove rthe whole fees thing for a few years now? Me and a friend on the LDV forums crunched the numbers when the policy was announced and worked out this was likely and it would cost the treasury more money overall back when it was voted through.

I'm utterly amazed, given we did it with excel and a bit of basic maths, that it's taken them several years to catch up and work it through properly, increasing the repayment threshold substantially is going to reduce repayment rates and there's already a large chunk of people not likely to pay back loans under Labour's scheme.