Labour to ban over-60s from taking out student loans
Labour is set to ban over-60s from taking out student loans after taxpayers were saddled with £50m in unpaid debt.
A shake-up of higher education funding in England will end a clause which allows older learners to take out loans which they are unlikely to ever repay.
Last year, more than 1,000 students over the state pension age of 66 took money from the Student Loans Company (SLC) to cover their fees, data provided to The Telegraph under Freedom of Information rules revealed.
More than 3,800 students over the age of 60 took loans, with 1,824 also taking out maintenance loans. Since 2020, 18,127 loans have been taken by students over the age of 60.
This means that some pensioners could have received as much as £15,829 in government support, with a full maintenance loan on top of a full new state pension.
The outstanding balance for those over 60 was £49,011,160.
It comes as Labour doubles down on a Sunak-era commitment to ban those over the age of 60 from taking money from the Government to pursue degrees.
The 'Lifeline Learning Entitlement' will replace the existing higher-education funding system and will provide all new learners with a tuition fee loan entitlement to the equivalent of four years of post-18 education.
A spokesman for the Department for Education said: 'From January 2027, tuition fee loans will no longer be available to those aged 60 and over.'
Tom Allingham, of Save the Student, which provides financial advice to undergraduates, said: 'While the current system creates a generational divide – students aged 60-plus are far less likely to repay their loans, so for many, their degrees are effectively free – we believe the decision to limit student loans to the under-60s only is a step backwards, as it makes it much more difficult for older students to pursue higher education.
'Instead, we believe tuition fees should be abolished, allowing students of any age to gain a degree free of charge.'
Student loans can be taken out to cover tuition fees – which are set to rise to £9,535 in September – and living costs.
The amount that can be borrowed depends on the financial situation of the student in question, and the loans are not repaid until graduates earn over a certain threshold.
This means that those aged more than 60 when they take out loans are unlikely to repay their debt at all – unlike those who complete their studies when they're younger.
The average graduate in England last year was £48,470 in debt when they started repaying their loan. The ten most indebted students owe a collective £2.7m, with one on the hook for nearly £300,000 for their studies.
Liz Emerson, of the Intergenerational Foundation think tank said: 'While lifelong learning should be open to all who have never been able able to access higher education before, there is an obvious intergenerational unfairness if younger generations have to continue to pick up the bill for these older students who will obviously never pay back their student loans.
'This is another subsidy from young to old.'
Approximately £20bn a year is loaned to 1.5 million students, according to a briefing by the House of Commons.
The value of outstanding loans is forecast to hit £500bn by the late 2040s, government predictions show.
Debts to the SLC are wiped entirely after either 30 or 40 years, depending on when the loan was taken out.
A Department for Education spokesman said: 'This Government is committed to boosting opportunity and economic growth by building a skilled workforce, while ensuring the student finance system remains fair and sustainable.'
'The dire situation we inherited has meant this Government must take tough decisions to put universities on a firmer financial footing, so they can deliver more opportunity for students and growth for our economy through our Plan for Change.'
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