Student loans are financial instruments designed to assist students in covering the costs associated with higher education, including tuition, books, and living expenses. These loans often feature lower interest rates and deferred repayment schedules compared to other loan types, specifically while the borrower is enrolled in school. However, they also come with strict regulations regarding renegotiation and bankruptcy in many countries. The financial risk associated with student loan defaults can sometimes be borne by the educational institution. The structure and regulations of student loan systems vary significantly across different countries.
In 1969, a loan scheme for Hong Kong students was introduced to help full-time students at the Chinese University of Hong Kong and Hong Kong University.
In 1976, the Hong Kong student loan scheme was extended to cover full-time students in the Hong Kong Polytechnic.
In 1982, the Hong Kong student loan scheme was further extended to cover post-advanced level students in the Hong Kong Baptist College.
In 1984, loans were expanded to include students in the New City Polytechnic in Hong Kong.
Between 1990 and 1998, during the introductory phase of student loans in the UK, repayments were not collected through the tax system.
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.
Between 1990 and 1998, during the introductory phase of student loans in the UK, repayments were not collected through the tax system.
Since 1998, student loan repayments have been collected by HMRC via the tax system in the UK.
Between 2002 and 2012, public spending on education dropped 30%, while total enrollment at public colleges and universities jumped 34%.
After the passage of the bankruptcy reform bill of 2005, even private student loans are not discharged during bankruptcy, providing a credit risk-free loan for the lender, averaging 7 percent a year.
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."
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.
From 2007 up until 2012, the median family income saw a steady decline each year making it increasingly difficult for students to pay back college tuition.
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 regarding "preferred lenders" which resulted in borrowers incurring higher interest rates.
In 2007, a false claims lawsuit was filed on behalf of the federal government by former Department of Education researcher Jon Oberg against Sallie Mae, Nelnet, and other lenders, alleging they overcharged the U.S. government.
In May 2009, South Korea's student loans began being managed by the Korea Student Aid Foundation (KOSAF).
In 2009, the education loan is expected to grow at a rate of 32.3 percent.
In August 2010, Nelnet settled a false claims lawsuit for $55 million, which was filed on behalf of the federal government by former Department of Education researcher Jon Oberg.
In 2010, the education loan is expected to grow at a rate of 39.8 percent.
In 2010, the federal student loan program ran a multibillion-dollar "negative subsidy", or profit, for the federal government.
In 2010, the guaranteed lending program, where private lenders originated and held loans guaranteed by the government, was eliminated due to the perception that it boosted lending companies' profits without benefiting students.
For the 2011/2012 tax year, if a borrower's income is below £15,000, no student loan repayments are required in the UK, but interest continues to accumulate.
In 2011, the education loan is expected to grow at a rate of 39.8 percent.
Between 2002 and 2012, public spending on education dropped 30%, while total enrollment at public colleges and universities jumped 34%.
For the 2012/2013 tax year, if a borrower's income is below £21,000, no student loan repayments are required in the UK, but interest continues to accumulate.
From 2012 to 2014, the education loan is expected to grow at a rate of 44.8 percent.
As of 2013, many economists predicted a new economic crisis resulting from an estimated $1 trillion of student loan debt; however, most economists and investors believed that there was no student loan bubble.
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 purchasing bid.
In 2013, for the 2012/2013 tax year, if a borrower's income is below £21,000, no student loan repayments are required in the UK, but interest continues to accumulate.
From 2012 to 2014, the education loan is expected to grow at a rate of 44.8 percent.
In August 2015, the Indian government launched the Vidya Lakshmi portal on Independence Day, August 15, for students seeking educational loans. Five banks including SBI, IDBI Bank, and Bank of India integrated their systems with the portal.
In 2019, the Federal Pell Grant provided a maximum annual grant of $6,195 per student for the 2019-2020 award year.
As of August 15, 2020, 37 banks were registered on the Vidya Lakshmi Portal and offered 137 loan schemes.
In 2020, the amount of student loan debt had reached $1.6 trillion.
In 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.
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.
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