A change in the collection of student loans in public finances will increase the deficit by GBP 12 billion, according to a ruling by the National Statistics Office.
Amount It is expected that no repayment will be made, which could account for 45% of the loan, and is classified as public expenditure.
Student loans will now significantly increase the UK deficit ̵
The Government said the amendment would be taken into account in the tuition review, which should be published early next year.
The Statistic Authority's decision attacks an anomaly in which the cost of lending to students to cover fees and maintenance is missing from public finances.
Nicky Morgan, chairman of the Finance Committee and former Education Minister, welcomed the verdict that the current credit system had not been scrutinized if the government could "spend billions of pounds of public money without negatively impacting the deficit target."
The Economics Think Tank, the Institute for Fiscal Studies, says that the government is taking into account the real cost of the charging system, in which 70% of students do not fully benefit from re-pay, would bring public finances "in closer alignment with the economic reality" ,
Lowering fees to reduce the deficit?
Labor's shadow secretary Angela Rayner said the "student loan system" is a tax illusion that flatters the government's record. "
But Tim Bradshaw, chief executive of the Russell Group of Universities, said:" Ministers may now be tempted to cut funding from the university because they will look better for the deficit, but good policies should not be governed by accounting rules be dictated.
Nick Hillman, director of the Higher Education Policy Institute, said the "180 degree flip" would be "embarrassing" for policymakers.
But he warned that students might get less money, because they "suddenly look a lot more expensive" for the current taxpayer ".
Almost half of the student loan is expected to be written off – and this now needs to be reclassified, as spending, according to ONS, is expected to increase the deficit by £ 12 billion.
By 2023/24, the deficit would increase by 17 billion pounds, says the Institute for Fiscal Studies.
It will end an agreement that accuses the House of being a "fiscal illusion" of the Lords Economic Affairs Committee, which warned against disguising the actual cost of tuition.
The Lords Committee predicted that ignoring the loan costs until its amortization after 30 years would create a £ 1 billion public gap in the coming decades.
T His technological transformation could have a significant impact on the current review of university funding in England, which will consider lowering the £ 9,250 per year fee.
Higher tuition fees require higher lending – which now turns out to be spending billions more on the deficit.
This will incentivize the government to lower tuition and limit its negative impact on the deficit.
The change applies to student loans across the UK. However, most of this is achieved through loans to students in England.
Much of the university funding in England is now being funded by tuition fees – and if the fees were lowered, the question would be whether there would be a return to direct funding.
Alistair Jarvis, Chief Executive of Universities UK, warned of "tricky reactions" to the ONS verdict, which could cut student spending or reduce student numbers.
"It is essential to the universe Relationships are adequately and sustainably funded to ensure that students receive the high-quality university experience they rightly expect," he said.