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Student loan change adds £12bn to deficit

A change in how student loans are recorded in the public finances will add £12bn to the deficit, following an Office for National Statistics ruling.

The amount expected not to be repaid, which could be 45% of lending, will be reclassified as public spending.

Student loans will now significantly push up the UK's deficit - providing an incentive to reduce tuition fees.

The government said the change would be taken into account by the tuition fees review, due to report early next year.

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BBC News

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