How 50,000 graduates are charged penalty rates that add millions to their loans

More than 50,000 graduates a year are being charged “absurdly high” penalty interest rates on their student loans because of a little-known quirk of the system. As a result, as much as £75m in additional interest could be being added to these graduates’ loans this year, Telegraph Money can disclose…….

Amatey Doku, of the National Union of Students, said: “Absurdly high interest rates are only a small part of the problem but the Government’s willingness to continually add to the burden of student debt, and change the terms of repayment, is indicative of a complete disregard for the concerns of students, their families and the taxpayer, who will have to cover the cost of unpaid debt.

“It seems that the Government is bent on covering their ears and humming loudly to block out the critics as they make things worse and worse.”

Assuming those 50,000 graduates have the average debt of £50,000, the additional interest accrued could be as high as £75m a year…………..

Are student loans the way to go? Will these students ever repay the loans? If not, who bears the brunt of costs? Is it realistic for students to ever earn enough in their lifetimes to repay their student loans, whilst trying to pay off other amenities?

sam.brodbeck@telegraph.co.uk    ( 13th January 2018)

ARTICLE SOURCE: 

https://uk.yahoo.com/finance/news/student-loan-shock-50-000-081600140.html