Student bankruptcies treble
The number of students declaring themselves bankrupt more than tripled in 2003.
According to a report in today’s Independent, the Student Loans Company has revealed that 899 students filed for bankruptcy last year as a means of writing off student loan debts. The equivalent number for 2002 was 276.
Insolvency practitioners have longed feared that students would take advantage of a loophole in government legislation allowing student loan debts to be cancelled out by bankruptcy.
The statistics were released by higher education minister Alan Johnson in response to a written question from Phil Willis, the Liberal Democrat education spokesman.
The Insolvency Service has said that student loans are on the list of debts that can be cancelled out by bankruptcy. But the government is expected to close the loophole as part of the government’s controversial higher education bill, which passed its second reading last week by an embarassingly narrow majority of five.