Loan News Student Bankruptcies Triple
03 February 2004
More than three times as many students wrote off their student loan debts by declaring themselves bankrupt last year, new figures show.
The Student Loans Company claims that 899 students filed for bankruptcy in 2003, compared to just 276 in 2002.
A number of the students concerned are believed to have taken advantage of a loophole in the law which allows student loan provider debts to be cancelled out by bankruptcy.
The government has pledged to close the loophole as part of its controversial Higher Education Bill.
Opponents of the bill are concerned about fees that will add debts of around £9,000 to the £12,000 in student loans already owed by a typical university graduate.
The bill was narrowly passed by Parliament last week, with Labour scraping a narrow five vote margin after backbench MPs voted against the government on the issue of top-up fees.
The number of bankrupt students has risen from just eight in 1992 to 97 in 1998 and 249 in 2001.
The bankruptcy statistics have been released by higher education minister Alan Johnson in response to a Parliamentary written question from Liberal Democrat education spokesman Phil Willis.