16/06/2006

Graduates loans arrears rise

The latest figures from the Student Loans Company (SLC) have revealed that many students are struggling to keep up their loan repayments.

SLC reported that loan arrears were outstanding on £186m made in student loans in the year 2005 to 2006.

This takes the total to almost £19bn owed on loans made to students and graduates.

MPs have called on the government to address the problem of student loans urgently.

Most of the outstanding loan arrears are on the older-style 'mortgage' loans which rely on the students paying by direct debit arrangements.

The system was changed in 1998, replaced by a new repayment system based on income, with direct deductions from pay by employers.

The figures also revealed a rise in debt cancellations which have risen by almost a third on the previous year.

Sarah Teather, Liberal Democrat spokesperson on Education, said that an entire generation of young people faced "unprecedented" levels of debt burden that would affect their lives and had serious long-term implications for financial security.

(SP/CD)

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