MP takes stand against Government mis-selling of student loans

Steve has spoken out against proposals to retrospectively change the terms of student loans which will affect the poorest most.

 

The Department for Business, Innovation and Skills are currently ‘consulting’ on proposals to freeze the threshold at which students start to repay their student loans. Under the system introduced in 2012 students would start repaying their loans when they were earning £21,000 per annum and the threshold would rise with average earnings like the old system.

 

The Government is now proposing to freeze the threshold, meaning students will face paying thousands more.

 

The Government are only recovering about 45p in every £1 spent on student loans and, despite warnings at the time, the new system is actually more expensive than the one it replaced- without any extra money going into higher education.

 

These proposals are a clear breach of a government promise. If the figure is frozen estimates from the Sutton Trust show it will cost students thousands more, with women and those from poorer backgrounds bearing the brunt.

 

Steve McCabe MP said:

“The government are effectively admitting that they got their sums wrong when they trebled tuition fees and have decided to punish students for their errors. The government is trying to change the terms and conditions of student loans retrospectively, anywhere else we would call this mis-selling of a financial product.

 

“These proposals, along with the Government’s decision to scrap maintenance grants for our poorest students will only continue to discourage people from disadvantaged backgrounds from entering higher education. This is simply another betrayal of students by this Tory Government.”

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