The government has made a significant upward revision from its last estimate of a £200 billion figure in the 2040s, according to figures released in response to a written parliamentary question from Liam Byrne, Labour’s shadow universities, science and skills minister.
The change is highlighted by the writer and researcher Andrew McGettigan on his blog.
The new estimate reflects the government’s rising estimate of the Resource Accounting and Budgeting (RAB) charge – the portion of loan outlay that will never be repaid by graduates – as well as the coming abolition of student number controls. The government’s RAB estimate has risen from an initial 28 per cent, as the introduction of £9,000 fees was planned, to 45 per cent.
David Willetts, the universities and science minister, told Mr Byrne that the value of the loan book would reach £330 billion in real terms in 2044-45.
In a report on student loans last year, the National Audit Office said: “BIS forecasts that the total value of outstanding student loans will increase from £46 billion in 2013 to approximately £200 billion by 2042, in 2013 prices.”
Mr Willetts adds in the answer: “These estimates assume that fees will increase in line with inflation from 2016 onwards. These forecasts also take account of the freeing up of student number controls in the autumn statement, increases in loan take-up rates, demographic changes over time and updated earnings modelling.”