Is the UK Government’ s Student Loan System an Effective Economic Investment or a Growing Fiscal Liability?

Abstract

This report aims at establishing whether the UK Government student loan system is a healthy economic investment or burgeoning burden on the government. This is analyzed with the assistance of the recent scholarly articles, governmental articles, and economic criticism with an intention of considering the two-fold nature of the loan system in motivating more people to pursue higher education at the price of the state spending a considerable sum of money. It is known that the scheme is currently positioned to increase access to higher education, human capital creation and competitiveness of UK in the global market. Nonetheless, the report shows that there is an increasing fiscal issue, especially high non-repayments, long-term repayments and state write-offs all of them, burden budgets of states. This raises a query on the sustainability of the system whose economic gain in the long run might be covered with increased liabilities. The conclusions made show that in order to reach half-way position between the financial sustainability and the availability, new policy amendments, such as more favorable repayment schemes and alternative financing procedures should be mentioned.