News | Let University buy your student debt, says minister

The Government is researching an idea that would give universities more power to control their students’ debt.

It has been suggested that universities buy graduates’ loans from the Treasury to create direct repayments, with the institution profiting more as the student repays more money.

The proposal aims to tackle an increase in outstanding student debt in the UK.

Speaking to BBC Newsnight, the former Universities Minister David Willetts said: “The main point of the idea is to give universities a stronger incentive to focus on the prospects of their graduates”.

He added that the plan would “keep the graduate and the university in contact with each other”.

Student debt is currently written off thirty years after graduation.

Critics argue the overhaul would encourage universities to favour wealthier students and those studying more employment-focused degrees, as they would be more able to make repayments.

Speaking to Leeds Student, a First-year International History and Politics student explained: “It may encourage universities like Leeds to make sure all the degrees they offer are more employable and as such improve things for students after graduation”.

A First-year German student said: “If universities had greater autonomy over their students’ finances, there could be a slippery slope to higher tuition fees”.

It is believed universities could struggle to afford to take on their students’ debts.

Under the plan, the University of Leeds would go from having debt equivalent of about 38% of its current annual income to well over 100% within three years.

The proposal has not been adopted into government policy, although research into student loans is still emerging.

Charlotte Mason

Photo: Times Higher Education

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