Student debt is running at £36bn in the UK. A couple of years ago we commented on the level of student debt that remains unpaid in the USA. Student tuition fee debt in the USA in 2012 stood at $833bn and at the time exceeded the prevailing credit card debt.
Worryingly still is the fact that 3.4m students in the USA are repaying their debt but 238,000 students are defaulting and a further 22 per cent had to negotiate deferment terms. Where this was nit granted students were forced to take out further a loan from high-risk loan agencies who charged exorbitant interest rates. And so the viscous cycle begins.
In the UK the unpaid debt is running at about twice the level predicted by the government. They claim they had no financial model on which to base their calculations yet the USA situation has been running for decades. In the meantime students fell they are having to pay the student loan twice; once as they repay their own loan, and a second time, as tax payers when they have to fund the defaulting loans of others. Once again the government’s financial calculations appear to gone AWOL, next perhaps we may learn that the police commissioner scheme has cost more that anticipated.