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Packhorse Generation: The long debt tail of student loans

This report concentrates on student loans taken out to cover student fees. It does not include the additional costs of student maintenance loans taken out to cover living costs.

Written by Estelle Clarke, IF advisory board member, the report follows the likely interest that will be charged to graduates over a 30-year loan term and concludes that due to the front-loading of debt and interest charged, which is compounded monthly, most students – apart from higher earners – will be unable to escape their student debt and still owe large amounts at the end of the loan term.

The paper argues that such large non-repayment levels mean that, should government seek to sell of the loan book, then the terms of borrowing could become even more punitive unless students receive better protection from policy makers.