Government adding £16,000 to graduate debts by ‘rigging’ student loan interest rates, say Labour

From The Independent: According to House of Commons Library analysis, student debt is higher because the government uses the retail price index inflation measure to calculate interest on the loans, rather than the consumer price index.

[Read article on Independent website…]

‘It only helps richer graduates’: Tory plan to slash tuition fee interest rates slammed

From HuffPostUK: Theresa May is reportedly considering cutting the interest rate of student loans in a bid to win back young voters.

The Sunday Telegraph quoted a source who had discussed the plan with Downing Street, which would see the 6% interest levied on tuition fees slashed.

The plans were criticised by financial journalist Martin Lewis, who said such a move would only help the top earning graduates.

Jeremy Corbyn made the abolition of tuition fees one of the key policies in his general election campaign, and saw the majority of under 40s backing his party.

[Read full article on HuffPost UK…]

Grace is 25. Her student debt: £69,000

From The Guardian: When Grace Parkins opened her first statement from the Student Loans Company she wasn’t prepared for what she saw. After four years studying she discovered she was now more than £69,000 in debt.

Parkins was one of the first generation of students to sign up to £9,000 a year tuition fees. Like many recent graduates, she had no idea she was also racking up £8,000 of interest on her student loan while still at university. Students currently pay interest of 4.6% while they study, and this will rise to 6.1% in September. “That should have been made much clearer,” she says. “I didn’t expect that at all. All I really knew was that I wouldn’t be repaying until I earned £21,000 and my outstanding debt would be written off after 30 years.”

Parkins, 25, graduated from the University of Westminster last year and now works for a PR firm in Leeds. She doesn’t yet earn enough to start repaying – it kicks in at 9% of earnings above £21,000. “One of the reasons I am not totally panicking now is that I know I’m never going to repay all of that £69,000,” she says. “The government should do something about the level of debt students take on. It put some of my friends off going to university.”

[Read full article on Guardian website…]

Caroline Lucas expertly exposes Jacob Rees-Mogg’s hypocrisy over tuition fee debt

From Evolve Politics: BBC Question Time on 6 July featured Tory MP Jacob Rees-Mogg and Green MP Caroline Lucas.

Caroline’s response to the Tory logic espoused by Rees-Mogg: “So I just thought it was interesting how Jacob spent the first half of the programme saying that government debt is really bad, and we need to avoid it at all costs, and he just spent the last ten minutes saying that student debt is absolutely fine, and don’t worry about it at all.”

[Read full article on Evolve Politics…]

Student debt rising to more than £50,000, says IFS

From BBC News: Students in England are going to graduate with average debts of £50,800, after interest rates are raised on student loans to 6.1%, according to the Institute for Fiscal Studies.

Those from the poorest backgrounds, with more loans available to support them, will graduate with debts of over £57,000 says the think tank.

Interest charges are levied as soon as courses begin and the IFS says students on average will have accrued £5,800 in interest charges by the time they have graduated from university.

Report author Chris Belfield describes the interest as “very high”, but the Department for Education declined to comment on the increase in charges.

[Read full article on BBC News website…]

Poorest students leave university with the most debt thanks to the Tories, says report

From HuffpostUK: Students from the poorest backgrounds are leaving university with the most debt thanks to the Tories decision to scrap maintenance grants.

New research from the Institute for Fiscal Studies shows poor students will graduate owing more than £57,000 to the Government in tuition fees and loans – while even those from modest and well-off backgrounds will have debts of £42,500.

The research claims the controversial changes to tuition fees in 2012 – which triggered violent protests – actually made the poorest graduates better off to the tune of around £1,500.

But George Osborne’s decision in 2015 to replace the maintenance grant with a loan has helped wipe away that benefit, and most students will now be paying off their debts into their 50s.

[Read full article on HuffPost UK…]

UK student loan debt soars to more than £100bn

From The Guardian: Student loan debt in the UK has risen to more than £100bn for the first time, underlining the rising costs young people face in order to get a university education.

Outstanding debt on loans jumped by 16.6% to £100.5bn at the end of March, up from £86.2bn a year earlier, according to the Student Loans Company. England accounted for £89.3bn of the total.

“Lots of prospective and current university students will see these figures and worry about being part of an increasing pool of graduate debt,” said Jake Butler of at money advice website Save the Student.

“As fees increase this number will only go up, as more and more money is lent out each year. There is some cause for concern here, mainly for the government, as it is now widely accepted that the majority of graduates will never pay off their whole student loan debt before it is wiped off 30 years after their graduation.”

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Student loan interest rate set to rise by a third to 6.1% after UK inflation surge

From The Guardian: Students appear to be paying a heavy price for the UK’s inflation surge after the Brexit vote, which will drive the interest rate on their loans up by a third to 6.1%.

The rise in inflation, driven by a decline in the value of the pound since June, means students will be charged substantially more interest on their loans, despite the fact that many other consumers are benefiting from record low interest rates. Personal loans from high street banks have rates starting at 2.8%, while five-year fixed-rate mortgages are available from 1.29%.

Student loan interest rates are tied to March’s retail price inflation figure, published on Tuesday. At the moment, new starters and current students are charged 4.6% – the March 2016 RPI figure of 1.6%, plus 3% – on their loans. But from September this will rise to 6.1%, made up of the March 2017 figure of 3.1%, plus 3%.

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Students face tuition fees rising to £9,000

From BBC News: Universities in England will be able to charge tuition fees of up to £9,000 per year from 2012, as the government transfers much of the cost of courses from the state to students.

Fees will rise to £6,000, with an upper tier of £9,000 if universities ensure access for poorer students.

The announcement sparked an occupation of an administration building by students at Goldsmiths, University of London.

Students unfurled banners and called for other universities to join the protest.

Much of the proposed fee rise, up from the current £3,290 per year, will replace funding cut from universities in last month’s Spending Review.

This will mean that many courses, particularly in arts and humanities, will almost entirely depend on income from students’ fees.

“Essentially, it allows universities to replace a large part of the lost state funding for teaching by way of graduate contributions,” said Steve Smith, president of the higher education body, Universities UK.

[Read full article on BBC News website…]