The current chancellor Rishi Sunak is considering his options when it comes to overhauling student finance before next month’s budget. The Financial Times, who broke the story, noted the motivation behind the move would be to save the treasury money as well as encourage young people towards cheaper, vocational education pathways.
However, many students and student groups have expressed outrage at these plans; our own comment section ran a piece last week slating the idea.
Newcastle’s branch of the 93% Club, a foundation set up to encourage social mobility, commented: "The 93% Club Newcastle take a firm stance against the proposal to lower the threshold for student loan repayments. This would have a disproportionate impact on those from a lower socio-economic background and would discourage students, particularly students from state educated backgrounds, from going to university. This builds barriers to be able to be socially mobile and goes against what the 93% Club stand for."
A drop which would leave graduates earning the current £27,295 threshold amount paying around £800 more annually than they are currently.
The National Union of Students (NUS)’s Vice President for Higher Education Hillary Gyebi-Ababio said: "We would be totally opposed to any plans on reducing the salary repayment threshold for student loans. Like the Government’s decision to increase National Insurance contributions, this burden targets people earning lower incomes – after eighteen months of such hardship, and with the looming hike in energy prices set to hit millions of the most vulnerable this winter, the injustice is simply astounding.
"They should get their priorities right, end the marketisation of the higher education sector and scrap tuition fees. The Government must re-envision education, and begin to view it as a right for all, not a product that can be bought and sold for individual gain. Only then can we begin to build the student movement’s vision of a fully- funded, accessible, lifelong, and democratised higher education system.”
They should get their priorities right, end the marketisation of the higher education sector and scrap tuition fees.
The move to lower the threshold also caused some authorities to call into question the amount of interest students are currently paying for their loans (the current rate is 4.1% whilst you're studying, and then various rates after).
The chair of the Commons education committee, Robert Halfon argued: “In the short term if they are going to do this they need to lower interest rates that students have to pay. The interest rates are the things that are the real killer,”
The move would save the treasury a little under two billion pounds a year, and the government hopes this move would contribute towards Boris Johnson’s ‘leveling up agenda’ to change the system of technical and vocational training in the UK.
When approached for comment on the effects this would have on Newcastle’s students, Newcastle University spokesperson said: "We are watching the situation closely, particularly the differential impact that changes may have on students."