IFS Report: Student Loans to Cost Treasury Extra £10 Billion a Year

England’s student loan system will cost the government an extra £10 billion a year due to higher interest rates, the Institute for Fiscal Studies (IFS) has said. Over the past two years, the government’s borrowing costs have become higher than the rates it charges on student loans. The interest rate that students have to pay is determined by the Retail Prices Index (RPI) inflation, currently at 5.3 percent. However, the rate the government has to pay on its debt is set to rise above that number. As a result of the student loan rates being lower than the government’s borrowing costs, economists from the IFS have predicted losses for the Treasury....