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Extent of graduate payment revealed

Graduates could be forced to pay back double their original student loans under the new fees system in England, figures have suggested.

Those who take advantage of a £39,000 loan for a three-year course could find themselves repaying up to £83,000 in cash terms, data collected by leading accountants for the BBC showed.

And parents who seek to pay off their children's debts could face penalties, the Government has said.

But it insists the new system is fair and will lessen the burden on graduates, who are currently obliged to start repayments when they are earning more than £15,000.

While it will remain possible to pay off a loan straightaway, in future such action could incur a cost, universities minister David Willetts told the BBC.

This would mean parents who step in to help their children clear their debts could find themselves penalised.

"What we are looking at is whether, if people wish to repay early having taken out a loan, there should be any payment for that and on that we are going to be consulting people to seek their views," Mr Willetts said.

"The question on which we will consult is whether or not there should be a penalty for people."

Defending the new system, due to come in next year, he added: "For many people, what will matter the most will be the size of the monthly repayments and those, of course, are lower under our proposals than the current schemes because you start paying back when your earnings are more than £21,000 and you only pay 9 per cent of anything above £21,000.

Copyright © Press Association 2011

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