Rate hikes push up cost of financing student loans

The Institute for Financial Studies warned that the government would lose an average of £15,200 per student from the cohort that started last year as it flips from profits to losses on the loans. — Bloomberg

LONDON: The UK Treasury is facing a hit of more than £10bil (US$12.7bil) per year as higher interest rates push up the cost of financing student loans, meaning the taxpayer will now take a loss even on debt that is fully repaid, according to a new analysis.

The Institute for Financial Studies (IFS) warned that the government would lose an average of £15,200 per student from the cohort that started last year as it flips from profits to losses on the loans.