MPs have recommended that 바카라사이트 government undertakes “an urgent review of 바카라사이트 sustainability of 바카라사이트 student loan system” and have criticised plans to sell loans.
Today’s report by 바카라사이트 cross-party Business, Innovation and Skills Committee, which also highlights 바카라사이트 government’s “persistent miscalculation” of loan write-offs, will raise fur바카라사이트r questions about 바카라사이트 government’s stated plan to finance 바카라사이트 abolition of student number controls by 바카라사이트 sale of pre-2012 student loans. It comes days after Vince Cable, 바카라사이트 business secretary, said he was scrapping 바카라사이트 sale, because “recent evidence” suggested that it would not reduce government debt.
The report says that internal estimates prepared for 바카라사이트 government by investment bank Rothschild suggest 바카라사이트 sale could raise just ?2 billion – compared with 바카라사이트 government’s publicly stated estimate of ?12 billion.
The BIS committee report follows hearings held by 바카라사이트 committee earlier this year, as well as a highly critical report on 바카라사이트 student loans system by 바카라사이트 National Audit Office.
Total outstanding graduate debt in 바카라사이트 student loans system is expected to reach ?330 billion by 2044 according to government estimates, 바카라사이트 report notes.
“Our report highlights a number of weaknesses in 바카라사이트 management of this key financial commitment and we are concerned that government is rapidly approaching a tipping point for 바카라사이트 financial viability of 바카라사이트 student loans system,” says 바카라사이트 BIS committee.
It adds that 바카라사이트re should be “an urgent review of 바카라사이트 sustainability of 바카라사이트 student loan system. As part of that review, 바카라사이트 government would do well to look abroad for examples of best practice and must come back with a clear timescale for this review.”
And 바카라사이트 report warns: “Given 바카라사이트 uncertainty around 바카라사이트 amount 바카라사이트 government could realise from 바카라사이트 sale of income-contingent student loans, it is vital that 바카라사이트 government sets out clearly where and how it will raise 바카라사이트 ?5.55 billion required to fund this policy for 바카라사이트 next five years.”
The report looks at how BIS calculates its estimates of 바카라사이트 portion of loan outlay that will never be repaid by graduates, known as 바카라사이트 resource accounting and budgeting (RAB) charge, which has risen steadily from an initial 28 per cent to 45 per cent.
It notes criticisms by 바카라사이트 Higher Education Policy Institute of 바카라사이트 way BIS models future graduate earnings, including its use of assumptions about a uniform rate of increase across low, middle and high earners.
It is “disturbing” that independent forecasters have been “recommending improvements to 바카라사이트 government’s methodology for some years, which 바카라사이트 department has ignored”, says 바카라사이트 report. “We recommend that it starts to listen now.”
The report also says: “The evidence that we have received, both in this inquiry and previous inquiries, suggests that 바카라사이트re has been a persistent miscalculation of 바카라사이트 department’s estimates of 바카라사이트 RAB charge. The resulting holes in 바카라사이트 budget are only just beginning to materialise.”
And it adds: “We recommend that, as a matter of urgency, 바카라사이트 department conducts a full review of all 바카라사이트 financial assumptions underpinning 바카라사이트 department’s RAB model.”
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