LONDON (AP) — Britain’s Office of National Statistics says it is changing the way it accounts for student loans in a decision that will add 12 billion pounds ($15 billion) to the country’s budget deficit.
The statistics agency said in a statement Monday that the design of the system means much of the loan book is never repaid.
The agency’s David Bailey says the decision “properly reflects the true picture of government spending” because future write-offs will be reflected as government spending now.
Treasury officials stressed the accounting decision won’t affect students, who can still get loans.
But Matt Whittaker of the Resolution Foundation says it will inevitably affect the government’s approach to education financing “by making more explicit where the costs of the system lie.”
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