History of Student loan in Timeline

Student loans are designed to help students finance higher education, covering tuition, books, living expenses, and other associated costs. These loans often feature lower interest rates and deferred repayment schedules compared to standard loans, specifically while the student is enrolled. Regulations surrounding renegotiation and bankruptcy for student loans can be stricter depending on the country. The financial risk associated with defaults can sometimes be borne by the educational institution itself. Different countries have unique student loan systems, highlighting variations in approach and regulation.

1969: Introduction of loan scheme for Hong Kong students

In 1969, Hong Kong introduced a loan scheme for full-time students at the Chinese University of Hong Kong and Hong Kong University.

1976: Loan scheme extended to Hong Kong Polytechnic

In 1976, the loan scheme in Hong Kong was extended to cover full-time students in the Hong Kong Polytechnic.

1982: Loan scheme extended to Hong Kong Baptist College

In 1982, the loan scheme in Hong Kong was further extended to cover post-advanced level students in the Hong Kong Baptist College.

1984: Loans expanded to include new city Polytechnic

In 1984, loans in Hong Kong were expanded to include students in the new city Polytechnic.

1990: Establishment of Student Financial Assistance Agency

In 1990, the Student Financial Assistance Agency was established in Hong Kong to coordinate the administration of the student loan scheme.

1990: Introduction of student loans in the UK

In 1990, the UK government began phasing in student loans, but these early loans were not collected through the tax system.

1998: Student loan repayments collected via tax system

Since 1998, repayments of student loans in the UK have been collected by HMRC via the tax system, calculated based on the borrower's income.

1998: Student loans not collected through tax system

Student loans taken out between 1990 and 1998 in the UK were not collected through the tax system.

2002: Public spending on education decreases

Between 2002 and 2012, public spending on education in the US dropped 30%, while total enrollment at public colleges and universities jumped 34%.

2005: Bankruptcy reform bill passage

After the passage of the bankruptcy reform bill of 2005, even private student loans in the US are not discharged during bankruptcy.

2005: Bankruptcy law changes

In 2005, the bankruptcy laws in the US were changed so that private educational loans also could not be readily discharged in bankruptcy.

2005: Bankruptcy reform and student loan debt

Since 2005, bankruptcy reform has lead debtors to take responsibility for private student loan debt in bankruptcy, which can decline debtors’ intention of reducing costly defaults to declare bankruptcy.

2007: Median family income decline

From 2007, the median family income in the United States started to decline each year up until 2012, making it increasingly difficult for students to pay back college tuition.

2007: Investigation into lending practices

In 2007, Andrew Cuomo, then Attorney General of New York State, led an investigation into lending and anti-competitive practices between student lenders and universities.

2007: False claims lawsuit filed against lenders

In 2007, a false claims lawsuit was filed on behalf of the federal government against Sallie Mae, Nelnet, and other lenders, alleging overcharging of the U.S. government.

May 2009: Korea Student Aid Foundation established

In May 2009, the Korea Student Aid Foundation (KOSAF) was established in South Korea to manage student loans.

2009: Education loan growth rate

In 2009, the education loan sector was expected to experience a growth rate of 32.3 percent.

August 2010: Nelnet settles lawsuit

In August 2010, Nelnet settled a false claims lawsuit filed in 2007 and paid $55 million.

2010: Education loan growth rate

In 2010, the education loan sector was expected to experience a growth rate of 39.8 percent.

2010: Federal student loan program profit

In 2010, the federal student loan program in the United States generated a multibillion-dollar "negative subsidy", or profit, for the federal government.

2010: Elimination of guaranteed lending program

In 2010, the guaranteed lending program for federal loans was eliminated in the US due to perceptions that government guarantees boosted student lending companies' profits without benefiting students.

2011: Education loan growth rate

In 2011, the education loan sector was expected to experience a growth rate of 39.8 percent.

2011: Income threshold for student loan repayments

In the UK, for the tax year 2011/2012, no student loan repayments were required if the borrower's income was below £15,000, though interest continued to accumulate.

2012: Public spending on education drops

Between 2002 and 2012, public spending on education in the US dropped 30%, while total enrollment at public colleges and universities jumped 34%.

2012: Education loan growth rate

From 2012, the education loan sector was expected to experience a growth rate of 44.8 percent until 2015.

2012: Income threshold for student loan repayments

In the UK, for the tax year 2012/2013, no student loan repayments were required if the borrower's income was below £21,000, though interest continued to accumulate.

2013: Predictions of economic crisis

As of 2013, many economists predicted a new economic crisis would emerge as a result of an estimated $1 trillion of student loan debt impacting two thirds of graduating college students in America.

2013: Sale of student loan portfolio to Erudio

In 2013, The Department for Business, Innovation and Skills sold a portfolio of early student loans from the 1990s to Erudio, a company backed by CarVal and Arrow Global.

2013: Income threshold for student loan repayments

In the UK, for the tax year 2012/2013, no student loan repayments were required if the borrower's income was below £21,000, though interest continued to accumulate. Although this happened in 2012/2013, it still affects borrowers in 2013.

2014: Education loan growth rate

From 2012 to 2014, the education loan sector was expected to experience a growth rate of 44.8 percent.

August 2015: Vidya Lakshmi portal launched

In August 2015, the Indian government launched the Vidya Lakshmi portal on Independence Day for students seeking educational loans. Five banks, including SBI, IDBI Bank, and Bank of India, integrated their systems with the portal.

2019: Federal Pell Grant amount for 2019-2020

In 2019, the Federal Pell Grant provided a maximum annual grant of $6,195 per student for the 2019-2020 award year.

August 15, 2020: 37 banks registered on Vidya Lakshmi Portal

As of August 15, 2020, 37 banks were registered on the Vidya Lakshmi Portal and offered 137 loan schemes.

2020: Joe Biden's promise of student loan forgiveness

During his 2020 presidential campaign, Joe Biden promised student loan forgiveness. 64% of Americans back student loan forgiveness of $10,000 for individuals earning up to $150,000 annually.

2020: Student loan debt reaches $1.6 trillion

In 2020, the total amount of student loan debt in the US had reached $1.6 trillion.

January 2025: Student loan cancellation in the UK

As of January 2025, student loan borrowers in the United Kingdom on repayment plan five will have their loan canceled after 40 years from when they are due to start making payments.