A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:
The value of outstanding student loans is set to quadruple over the next 30 years because of changes including the hike in tuition fees. By 2042, £200 billion will be owed, an enormous amount of money.
Yet up to 50% of borrowers may never fully repay their loans. That means that in 30 years’ time, we are looking at huge sums of debt on the government balance sheet that may never be recovered.
So it is essential that government collects every pound it can of the debt that should be collected. That is going to require a much more robust strategy than the one described in this report. BIS is consistently overestimating how much will be recovered each year, and, given the expanding size of the loan book, the NAO does not consider that BIS is well placed to secure value for money.
BIS, along with the Student Loans Company and HMRC, needs to get a proper joint strategy in place that ensures realistic and robust recovery targets are set, information on borrowers is improved and every avenue for recovery is explored, to minimise the risk to the public purse.