UK Faces £10 Billion Student Loans Hit After Interest Rates Rise
- IFS says government to take losses even on debt that’s repaid
- Analysis shows the latest fiscal impact from rising rates
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The UK Treasury is facing a hit of more than £10 billion ($12.7 billion) per year as higher interest rates push up the cost of financing student loans, meaning the taxpayer will now take a loss even on debt that is fully repaid, new analysis shows.
The Institute for Fiscal Studies warned that the government will lose an average of £15,200 ($19,401) per student from the cohort who started last year as it flips from profits to losses on the loans.