Independent Commission on Fees urges Office for Budget Responsibility to investigate whether student loans system is 'value for money'

(Rob Stothard/Getty Images)

The Office for Budget Responsibility (OBR) is being urged to launch an investigation into the current student loan system to find out whether it provides value for money for both students and taxpayers.

Set up to investigate the impact of changes to university tuition fees and loans in England three years ago, the Independent Commission on Fees (ICF) published its latest report which warned the Government to be wary about increasing tuition fees – or removing the cap on them completely.

The ICF’s call has come after its report found fees at some universities could reach reaching £10,000 a year by 2020.

The finding were published after Chancellor George Osborne’s 2015 Budget announcement highlighted how student grants will be abolished and replaced by further loans, while tuition fees will be allowed to rise with inflation in universities demonstrating excellent teaching.

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Now, the ICF is calling on the OBR to look into the loans system after results from a ComRes poll – commissioned for the report – showed significant numbers of sixth formers are concerned about the cost of going to university.

78 per cent of the 1,017 16 to 18 year-olds interviewed across the UK said they were ‘very’ or ‘fairly’ concerned about the cost of living as a student.

A further 68 per cent said they were concerned about high tuition fees and 58 per cent described how they were concerned about having to repay student loans after their studies have finished.

Highlighting how any anticipated gains to the Treasury will be largely wiped-out by non-payments of debt, chair of the ICF, Will Sutton, said it was “absolutely vital” the OBR establish what the knock-on effects of the student loan system will be in the future on both students and the national finances.

He added: “We need to know whether the current system is offering us value for money and economic security.”