Government set to reduce earnings threshold at which graduates start repaying loans
Young people yet again on the chopping block
Ministers are reportedly ready to lower the salary threshold at which graduates start to repay their student loans. The move has already been highly criticised by MP's and students alike, with the former accusing the Tories of yet again taking aim at low-earning citizens.
Chancellor Rishi Sunak is allegedly looking to overhaul student financing over concerns within the treasury that the taxpayer pays too much for university courses.
Though the number has always fluctuated, students currently have to start repaying their loans when they earn £27,295 or more. But the government allegedly wants to go back under the £25,000 mark, reports the Financial Times.
Matt Western, the Labour MP for Warwick and Leamington, has accused the government of widening the gap between the working class and that of the wealthy.
"Govt plans to drop the student loan repayment threshold to £20k which will impact hardest on women graduates, those on lowest and middle incomes ultimately paying c. £10,000 more," he said.
He continued: "But wealthy students would be virtually unaffected!"
Many have been quick to look at the other financial legislation coming into effect.
"Every day, it becomes harder for young people just to get by financially in the UK," tweeted Kia.
"A cut to the earnings threshold for student loan repayments plus an increase in national insurance is going to have such a big effect on incomes."
This is being pitched as ‘lower the salary level at which graduates start repaying’ because of sounds nicer and fairer than ‘effective marginal tax rate of 50% for every graduate’ https://t.co/dB6HO7RTKN
— Kris ✨✨ (@krisnetic) September 26, 2021
"How many times have the Govt retrospectively changed the contract that they had with students?" tweeted another.
It is believed that a decrease in the cut-off point would push potential students towards vocational career options.
"We want people to think about their options — it's a big investment decision," said a former skills minister.
I am really scared by the idea that the government can retrospectively rewrite the rules of student loan as is convenient to them. https://t.co/1I0UWq9QZZ
— Adam B (@quartz_23) September 26, 2021
There is a clear need for sixth forms and colleges to make it abundantly clear that University is not the only option. However, this would take the choice away from students and make it a financial impossibility to access further education.
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