Government to lose money on all student loans – even those repaid in full

The increased cost of borrowing has left the government with an £11bn annual shortfall, according to the IFS

Student loans in England are expected to cost the government an extra £11bn a year as a result of higher interest rates massively increasing the cost of borrowing, according to analysis by the Institute for Fiscal Studies.

The IFS said the huge additional cost was not reflected in either of the government’s official measures of the cost of student loans. “This means that the loss of more than £10bn is not being captured in official figures,” it said.