Student Loan Repayments: Department for Business, Innovation & Skills
HC 818, Report by the Comptroller and Auditor General, Session 2013-14
- National Audit Office (NAO)
- TSO (The Stationery Office)
Until the Department for Business, Innovation and Skills (BIS) has a robust strategy for maximising the collection performance of student loans and improves its information on borrowers, it will not be well-placed to secure value for money, the report 'Student Loan Repayments: Department for Business, Innovation & Skills (HC 818)' concludes.
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; with the number of borrowers due to repay is projected to increase from three million in 2012-13 to six and a half million by 2042. The loan book is therefore becoming a substantial public asset. BIS and its collection partners, HM Revenue & Customs and the Student Loans Company (SLC), work together in a joined-up way, and in 2012-13 they collected £1.4 billion in student loan repayments at a cost of £27m.
In designing how student loans would work, BIS anticipated that a proportion of the loans would not be repaid. However, BIS has not set an annual target for the amount to be collected because repayments are affected by graduate earnings and economic factors outside its direct control. Annual repayment forecasts are consistently higher than amounts collected. While many borrowers may not be in employment, BIS and the SLC have carried out little analysis to establish how many may be working overseas, or the level of repayments that may be missed.
BIS needs to make better use of data to support its collection strategy and improve its understanding of where it could invest to maximise the collection value of the loan book.
|Format||Paperback||Published||28 Nov 2013|
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