\n<\/p>\n
Kemi Badenoch has said the Conservatives would scrap the \u201cunfair debt trap\u201d of high interest rates on student loans, piling pressure on Labour ministers to tackle the growing outrage over the high costs.<\/p>\n
The education secretary, Bridget Phillipson, admitted the system of plan 2 loans had \u201cproblems\u201d but suggested the government\u2019s priority would be maintenance grants for poorer students, rather than tackling the high interest rates.<\/p>\n
\u201cThe reality is that we inherited a system, and the Conservatives left behind this system, the system they\u2019re now complaining about. But it does have problems, it does,\u201d she told the BBC. \u201cBut there are also problems when you seek to make changes happen.\u201d<\/p>\n
The Tories said they would abolish real interest rates on plan 2 student loans, which can mean graduates pay tens of thousands more than they borrowed to fund university fees.<\/p>\n
The shadow education secretary, Laura Trott, said the loans should not rise faster than RPI inflation, a move which would cut the size of the loans for millions of graduates who started courses after 2013.<\/p>\n
She said the change would be funded by cutting tens of thousands of university courses that do not provide \u201cvalue for money\u201d for students.<\/p>\n
\u201cBritain\u2019s young people are facing a worse deal under Labour,\u201d Badenoch, the Tory leader, said.<\/p>\n
\u201cYouth unemployment is at its highest level in a decade, graduate recruitment is at the lowest level on record, and too many are going straight from education to welfare.<\/p>\n
\u201cLeaving university has become a moment of despair. Not just for young people but their parents too.<\/p>\n
\u201cIn particular, the plan 2 student loans are an unfair debt trap: millions of graduates are doing the right thing, paying every month, yet watching the balance they owe growing bigger because interest piles on faster than repayments.<\/p>\n
\u201cIf Labour had any sense, Rachel Reeves would act now and use her spring statement to adopt this plan.\u201d<\/p>\n
The row over the cost of student loans has escalated since the chancellor\u2019s decision last November to freeze the salary threshold for plan 2 student loan repayments for three years.<\/p>\n
Recently, the Labour MP Nadia Whittome said she had left university in 2019 with \u00a349,600 of debt and her repayments had shaved just \u00a31,000 off that, despite her earning in the top 5% of salaries as an MP.<\/p>\n
\u201cIf MPs are barely making a dent in their student loan debt after six years of repayments, what chance do other graduates have?\u201d she said.<\/p>\n
Phillipson said the salary threshold for repayments would be frozen in the coming years, bringing more graduates into having to repay their debt.<\/p>\n
\u201cThis is a system that developed over many, many years, came in in 2012-13, was not a system that we designed.<\/p>\n
\u201cThere are flaws in that system, I\u2019d be the first to admit it, but it is galling that the very people that designed, implemented and delivered that system are now complaining about the fundamental problems that they see within it, and alongside that, I would add, are now saying that university is not for some young people.<\/p>\n
\u201cAlways coming from people, by the way, who went and had the benefits of a university education and want to deny it to other young people.\u201d<\/p>\n
Trott said there was a \u201ca shift that needs to happen in the system\u201d and suggested creative arts courses were an example of those not providing value for money for students.<\/p>\n
\u201cI\u2019m not going to come on here and say that this is not difficult, but I think it\u2019s the right thing for young people.<\/p>\n
\u201cIt would mean that instead of going into one of these university courses, which has a negative outcome for them, they could go into an amazing apprenticeship where they\u2019re going to come out with no debt whatsoever, and they\u2019re going to come out with great job prospects. I think that is a better trade.\u201d<\/p>\n
The Treasury minister Torsten Bell said such a policy would have a catastrophic effect on universities.<\/p>\n
\u201cNothing about what would deliver the supposed 100k cut in student numbers in here, unless this is a hard commitment to introduce a cap on student numbers well below current levels,\u201d he posted on X. \u201cIn which case they may have just accidentally announced they\u2019d close a chunk of universities.\u201d<\/p>\n
A source close to the shadow chancellor, Mel Stride, said the Conservative party wanted to put a longer-term focus on rebalancing the economy, especially towards young people and those paying outsized marginal tax rates.<\/p>\n
\u201cThere is a palpable sense of unfairness \u2013 and even despair \u2013 among some people that they\u2019ve done all the right things and are getting screwed,\u201d the source said.<\/p>\n
\u201cPeople who went to uni, got a decent job and find themselves with sometimes ridiculously high marginal tax rates. They\u2019re paying eye-watering interest on their student loans to subsidise others doing low-quality degrees who will never repay.<\/p>\n
\u201cIt ends up being not just unfair but really bad economics too \u2013 people start to think: \u2018What\u2019s the point?\u2019 We have to give people some hope.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Kemi Badenoch has said the Conservatives would scrap the \u201cunfair debt trap\u201d of high interest rates on student loans, piling pressure on Labour ministers to tackle the growing outrage over the high costs. The education secretary, Bridget Phillipson, admitted the system of plan 2 loans had \u201cproblems\u201d but suggested the government\u2019s priority would be maintenance<\/p>\n","protected":false},"author":1,"featured_media":44986,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[3494,1049,7117,949,519,3547,3023,6651,393,3954,10552],"class_list":{"0":"post-44985","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-education","8":"tag-badenoch","9":"tag-debt","10":"tag-finance","11":"tag-high","12":"tag-interest","13":"tag-kemi","14":"tag-loans","15":"tag-scrap","16":"tag-student","17":"tag-tories","18":"tag-trap"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/44985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=44985"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/44985\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/44986"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=44985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=44985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=44985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}