New analysis of official government projections shows that the total interest being racked up by graduates on their student loan debt is set to rise to £8.6 billion in 2024, an increase of £4.2 billion.
Figures published by the Department for Education on student loan repayments show that almost all the rise in accrued interest will come from the post-2012 undergraduate loans, with the total interest added to these debts set to more than double from £3.5 billion to £7.6 billion over the next five years.
The Institute for Fiscal Studies has estimated that fewer than 2 in 10 graduates will fully pay back their student loans, with the taxpayer now set to pay for almost half of all debt taken out by students this year.
The Mayor of Tower Hamlets has called for fundamental change to the system to reduce the burden of debt caused by tuition fees and the rising cost of living.
John Biggs, Mayor of Tower Hamlets said: “This is an anxious and difficult time of year for many pupils as they receive their exam results and make important decisions about their futures. Tower Hamlets has the highest child poverty rate across the country and the council has brought in measures to support young people such as the multi-million pound tackling poverty fund, Young WorkPath and we’re working closely with local schools, however the Government’s tuition fees policy is discouraging young people from fulfilling their potential.
“Tuition fees are pricing many young people out of education and as the student loan debt soars it’s falling to the taxpayer to pick up the tab for the debt. It’s clear that the student loan system is broken and it’s time for a fundamental change to the system.”
Councillor Motin Uz-Zaman, Cabinet Member for Work & Economic Growth, said: “Many of our young people are facing sky-high tuition fees and start off their working lives with enormous debts. With so many options available in further and higher education, vocational training, and in the world of work, we need to ensure finances aren’t a barrier to potential. Our young people should be able to make choices about their next steps based on what’s right for them, not what they can afford. We need fairness in the system and that’s why we’re calling for tuition fees to be scrapped.”