Student loans in the UK have now been classified as toxic debt because it seems unlikely that graduates will ever earn enough to pay them off.
As the job situation worsens, more and more school leavers are expected to take places at the rapidly expanding Universities, and to fund this by taking out student loans to cover increasing fees.
However, due to the depressed economy it is now thought these students will find it impossible to find highly paid work at the end of their courses. For decades to come these students are likely to be repaying their debts at a rate below their accruing interest, meaning that they will owe more and more.
The government has decided to step in, and are expected to lend £80bn to the Student Loans Company, so that they can pay their directors salaries, bonuses and pensions, and write off foreign student debts in spite of their predicament. This is a surprise move because the SLC is actually a public sector organisation.
The treasury has also said that it expects the SLC to take steps to resolve the situation. SLC has responded that they are considering a merger with CosaNostra Banking of Sicily, and that eventually they expect to forcibly recover some of the defaulted loans from the Bank of Mumanddad.