History of Student loan in Timeline

Student loans finance post-secondary education expenses like tuition, books, and living costs. They often feature lower interest rates and deferred repayment schedules compared to other loans, allowing students to focus on their studies. However, student loans are often difficult to discharge in bankruptcy and are subject to specific regulations, which vary significantly across different countries.

1969: Loan scheme for Hong Kong students introduced

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

1976: Expansion of Hong Kong student loan program

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

1982: Expansion of Hong Kong student loan program

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

1984: Further Expansion of Hong Kong student loan program

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

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; these loans were not initially collected through the tax system.

1998: HMRC collects repayments via tax system

Since 1998, in the UK, Her Majesty's Revenue and Customs (HMRC) has been collecting student loan repayments via the tax system.

1998: Student Loans not collected via the tax system

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

2002: Decrease in public spending on education

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

2005: Bankruptcy Reform Bill

After the passage of the bankruptcy reform bill of 2005, even private student loans are not discharged during bankruptcy. This provided a credit risk free loan for the lender, averaging 7 percent a year.

2007: Median Family Income decline

In 2007 the median family income started a steady decline each year up until 2012, which caused an increasing difficulty for students to pay back college tuition out of savings and labor income.

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, revealing that some universities steered student borrowers to "preferred lenders" in exchange for "kickbacks," leading to policy changes at many universities.

2007: False Claims Lawsuit Filed Against Lenders

In 2007, Jon Oberg, a former Department of Education researcher, filed a false claims lawsuit on behalf of the federal government against Sallie Mae, Nelnet, and other lenders, alleging that they overcharged the U.S. government and defrauded taxpayers.

May 2009: Korea Student Aid Foundation (KOSAF) Established

In May 2009, the Korea Student Aid Foundation (KOSAF) was established in South Korea to manage student loans, reflecting the government's commitment to talent development and ensuring that financial constraints do not prevent students from pursuing education.

August 2010: Nelnet settles lawsuit

In August 2010, Nelnet settled a false claims lawsuit filed by Jon Oberg and paid $55 million.

2010: Federal student loan program ran a profit

In 2010, the federal student loan program generated 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 due to the perception that it boosted student lending companies' profits without benefiting students, and federal loans were divided into direct loans.

2011: Income threshold for student loan repayments in the UK

In 2011, specifically the 2011/2012 tax year, student loan repayments in the UK were not required if the borrower's income was below £15,000 per tax year, though interest continued to accumulate.

2012: Decrease in public spending on education

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 repayments in the UK

In 2012, specifically the 2012/2013 tax year, the income threshold below which student loan repayments were not required in the UK was £21,000 per tax year, though interest continued to accumulate.

2013: Predictions of an 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 loans 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, purchased the loan portfolio in 2013 and began managing accounts and deferment applications.

2013: Income threshold for student loan repayments in the UK

In 2013, for the tax year 2012/2013, student loan repayments in the UK were not required if the borrower's income was below £21,000 per tax year, however interest continued to accumulate.

August 2015: Vidya Lakshmi Portal Launched

In August 2015, specifically on Independence Day (August 15), the Indian government launched the Vidya Lakshmi portal to aid students in obtaining educational loans. The portal was developed through a collaboration between the Department of Financial Services, the Department of Higher Education, and the Indian Banks Association (IBA) under the Pradhan Mantri Vidya Lakshmi Karyakram.

2019: Federal Pell Grant Amount

In 2019, the maximum annual Federal Pell Grant was $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, offering 137 loan schemes to students.

2020: Joe Biden's presidential campaign promise

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 amount in the US

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

January 2025: Student loan forgiveness in the UK

In 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.