Postgrad loans – will they be paid back or another cost to the tax payer? IFS analysis

In the Autumn Statement last week, the Chancellor announced a new government-backed loan scheme for postgraduates. Loans of up to £10,000 are to be made available for under-30s studying full-time or part-time for taught masters courses from 2016/17. The government expects 84,000 people to be eligible for the loans in the first year they are available, and intends the long-run cost of the scheme to be zero, meaning that the full value of loans will be repaid, on average. While full details of the loan system have yet to be announced – and will be subject to consultation – the documentation accompanying the Autumn Statement highlighted one way in which the scheme could operate. This observation assesses the example loan scheme put forward and raises some issues that should be considered during the consultation.

Read more about these observations by Institute for Fiscal Studies’ researchers Jack Britton, Claire Crawford and Lorraine Dearden.

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