History of Student loan in Timeline
Student loans finance post-secondary education expenses like tuition and living costs. They often feature lower interest rates and deferred repayment during enrollment, distinguishing them from standard loans. Regulations regarding renegotiation and bankruptcy can be stricter than with other loan types. Student loan systems vary significantly across different countries.
1969: Introduction of loan scheme for Hong Kong students
In 1969, the loan scheme for Hong Kong students was introduced to help full-time students at two universities: the Chinese University of Hong Kong and Hong Kong University.
1976: Expansion of loan scheme in Hong Kong
In 1976, the loan program in Hong Kong was extended to cover full-time students in the Hong Kong Polytechnic.
1982: Further expansion of loan scheme in Hong Kong
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 students in the new city Polytechnic
In 1984, loans were expanded to include students in the new city Polytechnic in Hong Kong.
1990: Introduction of student loans in the UK
Between 1990 and 1998, student loans were introduced in the UK, but were not collected through the tax system.
1990: Establishment of Student Financial Assistance Agency
In 1990, a new government office, the Student Financial Assistance Agency, was established to coordinate the administration of the student loan scheme in Hong Kong.
1998: Student loans in the UK
Between 1990 and 1998, student loans were introduced in the UK, but were not collected through the tax system.
1998: Repayments collected by HMRC
Since 1998, repayments have been collected by HMRC via the tax system, and are calculated based on the borrower's current level of income.
2002: Public spending on education dropped
Between 2002 and 2012, public spending on education 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 are not discharged during bankruptcy unless the debtor can demonstrate "undue hardship."
2005: Changes in bankruptcy laws
In 2005, bankruptcy laws were changed so that private educational loans also could not be readily discharged unless repaying the loan would create an "undue hardship".
2005: Bankruptcy reform and student loan debt
Since 2005, bankruptcy reform lead debtors have to take the responsibility of private student loan debt in bankruptcy which can decline debtors’ intention of reducing costly defaults to declare bankruptcy.
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, addressing preferred lender arrangements and kickbacks.
2007: False claims lawsuit filed against lenders
In 2007, a false claims lawsuit was filed against Sallie Mae, Nelnet, and other lenders by Jon Oberg, alleging overcharging of the U.S. government.
2007: Median family income decline
Starting in 2007, the median family income experienced a steady decline, making it increasingly difficult for students to afford college tuition out of savings and labor income.
May 2009: Establishment of Korea Student Aid Foundation (KOSAF)
In May 2009, the Korea Student Aid Foundation (KOSAF) was established to manage South Korea's student loans, supporting talent development regardless of financial constraints.
2009: Education loan growth rate expected
In 2009, the education loan sector was projected to experience a growth rate of 32.3 percent.
August 2010: Nelnet settles false claims lawsuit
In August 2010, Nelnet settled a false claims lawsuit, filed in 2007, and paid $55 million.
2010: Education loan growth rate expected
In 2010, projections indicated that the education loan sector would grow by 39.8 percent.
2010: Federal student loan program profit
In 2010, the federal student loan program ran a multibillion-dollar "negative subsidy", or profit, for the federal government.
2010: Elimination of guaranteed lending program
In 2010, the guaranteed lending program was eliminated because of a widespread perception that the government guarantees boosted student lending companies' profits but did not benefit students by reducing student loan costs.
2011: Income threshold for student loan repayment
For the tax year 2011/2012, if a borrower's income in the UK was below £15,000, no student loan repayments were required, although interest continued to accumulate.
2011: Education loan growth rate expected
In 2011, there was an expectation that the education loan sector would see a growth rate of 39.8 percent.
2012: Public spending on education dropped
Between 2002 and 2012, public spending on education dropped 30%, while total enrollment at public colleges and universities jumped 34%.
2012: Income threshold for student loan repayment
For the tax year 2012/2013, the income threshold below which no student loan repayments were required in the UK was £21,000, though interest still accumulated.
2012: Education loan growth rate expected
In 2012, the education loan sector was anticipated to grow at a rate of 44.8 percent.
2013: Predictions of economic crisis
As of 2013, many economists are predicting a new economic crisis will emerge as a result of an estimated $1 trillion of student loan debt currently impacting two thirds of graduating college students in America.
2013: Sale of early student loan portfolio
In 2013, The Department for Business, Innovation and Skills sold a portfolio of early student loans from the 1990s. Erudio, backed by CarVal and Arrow Global, was established to manage these accounts after a successful bid in 2013.
2013: Income threshold for student loan repayment
In 2013, repayments continued to be collected via the tax system.
2014: Education loan growth rate expected
In 2014, projections indicated that the education loan sector would grow at a rate of 44.8 percent.
August 2015: Vidya Lakshmi Portal Launch
In August 2015, specifically on Independence Day (August 15), the Vidya Lakshmi portal was launched to benefit students seeking educational loans. This initiative was developed under the coordination of the Department of Financial Services, Department of Higher Education, and the Indian Banks Association (IBA).
2019: Maximum Federal Pell Grant Amount
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 the Vidya Lakshmi Portal
As of August 15, 2020, 37 banks were registered on the Vidya Lakshmi Portal, offering 137 loan schemes.
2020: Joe Biden's campaign promise
During his 2020 presidential campaign, Joe Biden promised student loan forgiveness.
2020: Student loan debt reaches $1.6 trillion
In 2020, the total amount of student loan debt 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.
