More than half of graduates have not paid back any of their student loans, an Isle of Man Examiner investigation has revealed.

Since 2014, university students have taken out loans to pay for tuition fees.

They have to agree to pay back £2,500 each year with a rate of 5% interest added each year.

The loans, which cover most university fees for students from the island attending UK institutions, become repayable after students graduate and begin to earn at least £25,000.

Since 2014, a total of £55,826,042 has been lent by the Department of Education, Sport and Culture for students to pay tuition fees.

This includes 2,085 loans which have been advanced, meaning £11,133,680 is due to be repaid to the government.

On top of this, 700 graduates are now being charged interest, totalling £183,362.

In total 296 people have repaid their loans (a total of £1,520,020), leaving 1,789 loans totalling £9,602,843 outstanding, according to a response to a Freedom of Information request made by the Isle of Man Examiner.

Some 111 students are repaying in instalments totalling £194,179.

Of the students who have graduated, 862 have loans that are due for repayment (totalling £4,744,279).

And of these, 296 loans have repaid in full, leaving 566 outstanding graduate loans totalling £3,200,963.

Ninety five graduates are paying back their loans in instalments but the remaining 471 have yet to pay back anything.

This means 54.6% of graduates have not repaid or are yet to begin repaying their loans, the other 45.4% having either repaid them or are repaying them.

The repayment rate for graduates is 32.5%.

However, in its response to our Freedom of Information request, the DESC said the 32.5% repayment rate ’will improve in the next few months when the minimum payment has to be made prior to July 1’.

And the department said it was ’encouraged’ by the repayment rates as the loan scheme is ’still at a relatively early stage’ and over half of loans advanced are not yet repayable.

Some 1,278 students were provided with awards for the 2019-20 academic year.

Total awards for maintenance grants and tuition fees have fallen steadily, from £10,633,850 in 2014-15 to £8,846,012 in 2019-20.

To identify those who have met the requirement to pay, two loan statements are issued by the DESC each year.

For those whose repayment due date has been activated, one statement is accompanied by an income declaration for completion and return.

It is a stipulation of the contract signed by students when they took the loan that they notify any change of address, forward an annual declaration of income and inform the DESC when they exceed the £25,000 earnings threshold where mandatory repayments become due.

The DESC said: ’Should a student not return to the island, the loan agreement permits the debt to be registered with credit reference agencies. However, at this relatively early stage, this has not yet been necessary.’

But graduates who have spoken to the Isle of Man Examiner said that they found repaying the money more difficult than they imagined.

One said: ’I was in the fortunate position to get mine paid off in the first year after finishing university so no interest would accrue.

’However, I very much had to be proactive in contacting the government department at the time to get further information and got the impression that there would be limited enforcement.

’Money would not be taken direct from salary earned and the student awards department didn’t have contact with the tax department which would be an obvious way to track earnings and if the individual remained resident on the island.’

interest

Another graduate said: ’I’ve paid mine all back now. They started adding interest as soon as I finished university, so before I was even earning that £21,000 threshold [the threshold at the time] - I started paying it back.

’It took months to convince them to let me start paying back.’

Even though she wasn’t earning the £21,000 required as she hadn’t been in her job for long by the time the repayment assessment form came out, she still wanted to make the payment to avoid paying more interest.

She added: ’They didn’t reply for a good two months - after sending them at least six emails saying I wanted to start repayments immediately - and they then spent a month saying: "Yeah, but you don’t need to start paying it yet because you don’t earn enough." Were they just trying to make as much money as they could out of me?’

A third graduate said he had never received any contact, written or otherwise, from the DESC with regards to his loan, before or after changing address.

He said: ’Requiring students to voluntarily stay in touch is an own goal if they want to get the Treasury’s "loans" back.’