The university sector is facing a “fiscal time bomb”, the chairman of the Commons business committee has warned, after it was revealed that the government has dramatically revised down the proportion of student debt that will ever be repaid.
Adrian Bailey said the Treasury needed to face up to the problem, after David Willetts, the universities minister, revealed the rate of non-repayment of student loans is near the point at which experts believe tripling tuition fees will add nothing to Treasury coffers.
Bailey said: “There is a huge potential black hole in the government’s budget figures. You’ve got all these confident predications about budget deficit falling and right in the middle of that is a potential fiscal time bomb that doesn’t seem to have been addressed.”