Number of students filing for bankruptcy triples

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The Independent Online

The number of students writing off loan debts by declaring themselves bankrupt more than tripled in 2003, government figures showed yesterday.

According to the Student Loans Company, 899 students filed for bankruptcy last year, compared with 276 in 2002.

A number of them are believed to have taken advantage of a loophole in government legislation allowing student loan debts to be cancelled out by bankruptcy.

The statistics were released by Alan Johnson, a Higher Education minister, in response to a written question from Phil Willis, the Liberal Democrat education spokesman.

Guidelines from the Insolvency Service say that student loans are on the list of debts that can be cancelled out by bankruptcy. But the Government has said that it plans to close the loophole as part of the Higher Education Bill, which received a second reading last week by 316 votes to 311, a majority of five, after Labour backbenchers rebelled over plans for university top-up fees.

Universities throughout the United Kingdom will also be hit by a week of strike action by lecturers and students later this month, forcing thousands of lectures to be cancelled.

Leaders of the Association of University Teachers (AUT) and National Union of Students (NUS) are planning the week-long action in protest at top-up fees and plans to modernise lecturers' pay. The campaign will include a shutdown of all campuses on 25 February, with lecturers and students mounting pickets to stop colleagues taking or going into lectures.

Such large-scale joint action is unprecedented in the history of university industrial relations and is expected to lead to courses closing at least for a day in most universities.

One of the main aims of the action is to persuade enough Labour MPs to rebel during later debates on the Higher Education Bill - which allows universities to charge fees of up to £3,000 a year from 2006 - and kill off the legislation.