28.11.13
Government overestimating student loan recovery – NAO
BIS must improve its strategy for the collection of student loan repayments, a new report by the National Audit Office (NAO) warns.
The number of borrowers due to repay student loans is projected to increase from 3 million in 2012/13 to 6.5 million by 2042, but forecast repayments are currently around 8% higher in value than actual repayments.
The NAO found that BIS needs to make better use of data to support its strategy and improve its understanding to develop a more accurate forecasting model. Currently there is little analysis to establish how many people with student loans are working overseas or the level of repayments that may be missed.
It estimated that 50% of borrowers with new loans will not fully repay the government.
Amyas Morse, head of the NAO, said: “Given the expanding size of the student loan book, the Department for Business, Innovation and Skills now needs to take a more energetic and considered approach to maximizing the value of the loan book to the taxpayer and achieving a high level of collection performance.”
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