Socialist Worker

Student loans: private companies tighten grip on graduates’ wallets

by Sian Ruddick
Issue No. 2122

The economic crisis is having a major effect on the ability of graduates to pay back their student loans.

A third of students who began university since loans were introduced are not making any repayments on their loans because they are earning less than the £15,000 a year threshold.

The interest on the loans has also been raised to take inflation into account. This has led to a dramatic decline in the proportion of their loans that students have paid off.

On top of this, the government has sold off some of its student loan debt, which is worth more than £18 billion overall.

One of the buyers is private company Thesis Servicing, which this month becomes responsible for making graduates repay their loans.

The loans were previously held by the government-run Student Loans Company.

Thesis is a subsidiary of Link Financial, whose shareholders include failed bank HBOS, the US-based bank Morgan Stanley and the hedge fund Cheyne Capital Management.

Meanwhile companies and businesses are cutting their graduate intake schemes.

Pardeep Nijjar, a student at Leeds university, believes the crisis will have a direct impact on students. “You’re trying to study but you have the worry of tuition fees and loans,” he told Socialist Worker.

“You can say you’ll spend it now and pay it back later—but you don’t know what the economic situation will be when you graduate, or whether there will be any jobs.”

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Article information

Tue 7 Oct 2008, 18:07 BST
Issue No. 2122
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