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Student Debt Defaults
| The issue of student debt defaults is so serious that recently it was debated in the House of Commons. In reply to a question posed by Lindsay Hoyle who is the labour MP for Chorley, David Lammy replied that the number of borrowers who had defaulted on student debt repayments was around 90,000. This was seen as an indication of the difficulties young graduates were experiencing as a result of the current recession. The fear was that the knock on effect of this might be that less young people would go to university as they would be too concerned about the levels of debt they might accumulate while there. During this debate the issue of overseas students was raised. There was some concern that overseas students could obtain student loans in the UK and not repay them, which would seriously affect the whole of the student loan scheme. If the student is from the EU this should not be an issue, as parity in tax schemes mean that the loans could be recovered from the authorities of the country in which the debtor was domiciled. Stephen Williams, the Liberal Democrat MP from Bristol West pointed out that students who graduate this year will find that they have to face an unprecedented difficult outlook. It is certainly tough for new graduates. They will be leaving university with average debts at a higher level than ever before. In addition the prospects of finding jobs that are appropriate to their qualifications and that will pay a reasonable salary are extremely difficult given the rising levels of unemployment and the manner in which many companies are attempting to reduce their costs by reducing wage levels. It is not surprising that many young graduates are finding it very difficult to cope with a mountain of debt after spending years shuffling credit cards, student overdrafts, student loans and increasing levels of university fees. The CAB has to deal with hundreds of these debt problems every week. It advises anyone facing problems due to debt should seek debt advice before things get even worse. |
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