Friday, July 7, 2006
Category:
Finance News
According to a recent survey by Callcredit, hundreds of thousands of graduates and students are at risk of overstretching their personal finances due to the government refusing to share details about student loan accounts.
Shared data is used by the credit industry as a tool on which it bases lending decisions, however student loan information is not available to commercial lenders.
There are a few ways the effect of sharing this data can be shown, depending on the type of student loan taken. If graduates opted to make student loan repayments directly from their wages each month, they might be granted credit which they would be unable to afford as their salary would effectively be less than that declared. On the flipside, someone who has had a perfect history of repaying their student loan could be rejected for credit because they might not have anything else on their credit history, which is used by lenders to make decisions.
Callcredit industry affairs director Mel Mitchley commented “The information should be shared as it would help people who have a responsible attitude to their student debt and prevent those who are already in difficulty being granted further credit.”
Figures from March 2005 show that 2.8 million people in the UK had a student loan, with the borrowing amounting to £16.45bn.
