Student loan shake-up puts £12bn hole in public finances

National deficit increases after ONS says student loans count as government spending

Philip Hammond is facing a 12bn hole in the public finances this year after changes to the way student loans are treated on the government's books, reflecting that many will never be repaid.

In a stroke of the pen from the Office for National Statistics, student loans will now be treated as part financial asset in the national accounts, because some will be repaid, while part will be classified as government expenditure, as some loans will never be paid back in full.