Magazine article The Times Higher Education Supplement : THE

Christmas Stuffing: PAC Chair Slices Up Student Loan Mandarins: News

Magazine article The Times Higher Education Supplement : THE

Christmas Stuffing: PAC Chair Slices Up Student Loan Mandarins: News

Article excerpt

"Jesus," muttered Margaret Hodge, chair of the House of Commons Public Accounts Committee, under her breath.

Ms Hodge was not breaking into a Christmas carol: she was giving her verdict on two "deeply unprepared" senior civil servants (her words), who were appearing before the committee of MPs last week after a highly critical National Audit Office report on the student loans system.

First up was Martin Donnelly, permanent secretary at the Department for Business, Innovation and Skills. Asked to provide the department's assumptions on future graduate earnings - a key part of the multibillion- pound student loans system - Mr Donnelly's answers included the sentences "I'm not sure I understand" and "I can't give you a precise figure".

Ms Hodge responded: "I don't know how I do (know) and you don't. I will tell you what it is." She went on to cite a BIS estimate of 2 per cent annual growth in graduate earnings - a figure she described as "optimistic", considering it is above the Office for Budgetary Responsibility's estimate (1.3 per cent).

One aspect Mr Donnelly was able to confirm was that BIS now estimates "35 to 40 per cent" of student loans will never be repaid. …

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