Universities are facing a potentially explosive situation after a government decision to cap their student loan repayments has left them facing a shortfall of more than £1bn.
The Financial Times reports that the Government is considering a cap on the repayment of Stafford loans, the student loans that have the largest debt of any type.
The news comes just days after the Government announced a £1,000 cap on student loan payments, which will affect about 2 million people.
The new cap will only apply to people who are already paying their loan back on time.
While the Government has said that it will be “comprehensive” about its repayment plans, the move will likely be met with anger from students who are now unable to access loans that were originally meant to be paid off in full over the course of a few years.
The Treasury says that its plan will mean that over time the UK will have more than 300 million people on the books with debt that is over £1tn.
The impact will be felt by those with the biggest debts, especially those with a degree or more in education.
The FT says that the government’s plan would mean that “only a small fraction” of the students in the UK are in debt and that only a fraction of those who have been on the streets for weeks or months will be able to access an education.
This is not the first time that the UK has seen a major crisis at the top end of its education system.
The government is also facing a major restructuring of its student loan servicing system in the wake of a major overhaul of the way it manages debt in the US, which is also in the midst of a crisis.