Economic Affairs Committee welcomes support for possible changes to student loans
The House of Lords Economic Affairs Committee has welcomed recent papers by the Office for National Statistics and the Office for Budget Responsibility which recognise the need to reconsider the treatment of student loans in the national accounts. Further, the Office for Budget Responsibility acknowledges the extent to which fiscal illusions caused by the accounting of student loans flatter the deficit.
The Committee published a report last month, 'Treating Students Fairly: The Economics of Post-School Education', which found that the decision to switch almost all higher education funding to tuition fees financed by student loans has hidden the true cost of public spending on higher education. The changes have distorted the education system in favour of undergraduate degrees at the expense of other options.
Lord Forsyth of Drumlean, Chairman of the Economic Affairs Committee, said:
“We welcome the recognition by the Office for National Statistics and Office for Budget Responsibility this week that the treatment of student loans in England should be reconsidered, and that the Office for Budget Responsibility appears to support our recommendation that write-offs on student loans should be recognised upfront.
“It is also welcome that others have now recognised, as we show in our report, the pyramid of fiscal illusions in the treatment of student finance in the national accounts which flatters the deficit.
“Both Offices recognise the work of the Economic Affairs Committee in reaching these conclusions, and we await the Government's response to our most recent report, 'Treating Students Fairly: The Economics of Post-School Education', shortly.”
