See how borrowing, interest and future earnings shape the real cost of a degree.
There are two distinct issues: recoverable repayments that government would lose if loans were cancelled, and balances borrowers will not repay. We show both explicitly. A proposed reserve against write-offs is an additional policy allocation, not a second accounting loss automatically payable on top of the fair value of the loan asset. This conservative scenario tests what happens if the Fund is required to finance both.
Definitions and limitations: Face value £324.8bn is the March 2026 UK student-loan balance. The 60% starting recoverable-value ratio is rounded from England's March 2025 fair-value-to-face ratio (157.866 / 264.635); it is not an official UK 2026 valuation. The difference between face and fair value is not an official write-off forecast: it also reflects interest, timing and discounting. It is used here as a conservative write-off-reserve proxy solely to make the requested second funding obligation visible. The recoverable-value target is in present-value pounds; the reserve target is in undiscounted starting-balance pounds, so they must not be added as if they were a single accounting liability. Surplus must be net of tuition, vocational education, scholarships, administration, tax credits and any other legacy provisions; the same pound cannot be allocated twice. Under run-off, existing repayments continue and the reserve is an optional policy commitment, not a required government cash payment. This is a scenario, not a borrower-cohort forecast, and it does not establish a reduction in consolidated government debt. Sources: DfE accounts 2024–25; SLC student loan statistics.