Today the Office for National Statistics have published changes to the way in which they record student loans in the public finances, resulting in an extra £12bn being added to the budget deficit.
Responding to the announcement from the ONS, David Robinson, Director of Post-16 and Skills at the Education Policy Institute (EPI), said:
“The decision of ONS to treat the proportion of student loan debt that is unlikely to be repaid as immediate budget expenditure is logical, and removes an undesirable incentive for governments to ignore the future costs of university funding decisions.
“In the short-term, this will be seen to create another fiscal headache for the Chancellor, but in the longer term it should lead to more rational decisions on university funding.”
The ONS’s announcement, published on 17th December, can be found here: https://www.ons.gov.uk/