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News, Student Debt

“£70bn student debt timebomb: Money owed will TREBLE in four years””

“Student debt will treble to a staggering £70billion in four years because ministers underestimated the number of universities charging maximum fees, an official report will say today.

The scathing analysis from the Public Accounts Committee blames ministers for pushing up fees to £9,000.

MPs found that, in just four years, overall student debt will increase from the current £24billion to £70billion

The report said the register should be made public and warned that future cutbacks could see some universities ‘shrink or even fail’.

It blamed ministers at the Department of Business, Innovation and Skills, who had assumed universities would charge an average of £7,500 a year for tuition.

However, the majority of universities are charging maximum tuition fees of £9,000 – increasing the pressure on the student loan budget. Shadow ministers and student leaders yesterday accused the Government of saddling students with unmanageable levels of debt.

Aaron Porter, president of the National Union of Students, said: ‘Nick Clegg said before the last general election that we cannot build a future on debt but the changes he championed mean that the amount that graduates are in debt to their government could almost treble in just four years, hindering their chances to borrow for other purposes, to save for their futures or even for a pension.’

Gareth Thomas, Labour’s universities spokesman, said: ‘The Public Accounts Committee have confirmed the Government’s sums could be wrong by several hundreds of millions of pounds and that the next generation of students are facing a £70billion debt bill to pay for the unfair and unnecessary decision to treble tuition fees.

‘This is the latest independent report to call the Government’s plans into question. David Cameron and David Willetts [universities minister] need to use the coming white paper on the future of higher education to signal a substantial rethink.’

Margaret Hodge, the Labour MP who chairs the Public Accounts Committee, said: ‘Higher than forecast fees will increase the financial pressures on students.”

Original article

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