BBC Home
Explore the BBC
BBC News
Launch consoleBBC NEWS CHANNEL
Last Updated: Thursday, 15 May, 2003, 16:58 GMT 17:58 UK
Bankrupt students to get pay-out
Students who went bankrupt but carried on paying off their student loans are to be paid back a total of 75,000.

About 200 students will get the cash they paid back - plus interest - as the government moves to close a loophole which they say allows graduates to dodge their debts.

Announcing the plan, Higher Education Minister Margaret Hodge said it had always been the government's policy that people could not try to avoid paying off student loans by declaring themselves bankrupt.

But the government has been told by the Insolvency Service that student loans are on the list of debts that can be cancelled by bankruptcy.

So it has told the Student Loans Company to give back loan repayments made by 198 bankrupts.

In a written statement to MPs, Mrs Hodge said: "It has become clear that under current legislation, students loans are written off on bankruptcy.

"We will be amending our legislation so that graduates will have to continue repaying their student loans even if they declare themselves bankrupt and we hope to do so as soon as possible.

"Graduates should not see bankruptcy as an easy route to repaying the money they have borrowed through the generously subsidised student loan system."




SEE ALSO:
Doubts over fees collection
03 Feb 03  |  HE case studies
Tories say 'scrap tuition fees'
13 May 03  |  Education
Universities query student sums
13 May 03  |  Education
Universities still want more money
12 Feb 03  |  HE reaction
Students tackle MPs over fees
05 Mar 03  |  Education
Debt 'deters poorer students'
04 Feb 03  |  Education


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | World | UK | England | Northern Ireland | Scotland | Wales | Politics
Business | Entertainment | Science/Nature | Technology | Health | Education
Have Your Say | Magazine | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific