The Government has announced major changes for those paying off student loans
The Prime Minister should consider scrapping student debt or making interest payments interest free to encourage more people into higher education, M.E.N readers have said.
Yesterday, the Government announced major changes to interest rates and repayment thresholds for anyone with a student loan.
The Department of Education published its new interest rates for undergraduate and postgraduate loans; the new repayment thresholds for Plan 1 loans; and the interest rates and deferment threshold for Mortgage Style Student Loans.
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The new interest rates are set to affect the RPI rates for student loans – the base inflation measure. The government uses the RPI figure from March each year to set the baseline for student loan interest rates starting in September.
Depending on which plan you are on, you will be charged RPI plus up to an extra 3%. In the update issued yesterday, it has been confirmed that RPI rates are 4.1% for anyone paying back their loan from September 1. The repayment threshold for Plan 1 loans has also been affected.
You can see a full breakdown of changes to the student loan repayment plans here.
‘This is so wrong’
Following the announcement, M.E.N. readers expressed their views on the current student loan system on our Facebook page.
Ellen Vdk said: “Make it 0% and then the government has more chance of getting the full amount back.”
Su Bo expressed a similar view, adding: “Make it interest free or very very low interest. Those are the only sensible options. We want to encourage people to continue to go into higher education not put them off.”
Michelle Lindsay commented: “This is so wrong… why are we not trying to help students and our young people, on one hand we talk about NEET getting out of control and then on the other hand we’re putting up the interest rates for student loans, honestly the mind baffles!
“No wonder we have a shortage of teachers / nurses / doctors etc. because people can’t afford to pay the fees, living expenses etc etc.”
Tasha Hodrien shared her own story of the student loan system, saying: “When I left uni in 2018 my student loans totalled about £40k, I am a low earner so my repayments are low or £0 each month. With the interest adding in the last 8yrs mean my student loan is now almost £75k. I’m 50 and will probably never clear this debt.”
Natasha Burr also shared her personal story on experiencing student debt, saying: “I started paying my SL [student loan] back in 2016, it sat at 25K. I had only a small amount of time where I wasn’t paying anything back, I’m now down to 22K. Nearly 10 years paying it back, most months I pay back £200 something but interest is £100.”
Fiona Stewart compared the lower rates of student debt in Scotland compared to England. Eligible Scottish students receive free tuition funded by the government, while English students face tuition fees up to £9,790 per year.
Fiona said: “If Scotland can offer tuition fees for free why can’t the rest of the UK? Our domestic students are our next generation of innovators, health care professionals, SME’s, scientists.”
Irene Counsell expressed frustration at the different changes to the repayments on the various student loan plans.
Irene said: “Why is it so complicated? Just set a low fixed rate from the outset, or better still interest free.”
While Hannah Sofia Hulme said simply: “He [Andy Burnham] should be scrapping student debt.”
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