There have been many reports that the Government are planning to lower the student loan repayment threshold from £27,295 to £23,000, a move that would drag thousands more lower-paid graduates into paying back their loan. While this proposal was not confirmed in the Budget last week, the Government have said they will respond to the Augur Review on post-18 education funding in the “coming weeks”.
After Ministers’ failure to provide the financial support needed by students in England during the pandemic, in contrast with the devolved nations, this plan adds insult to injury for the generation who will covering the cost of Covid-19 for decades to come.
When Ministers introduced the current funding system, they were warned that they were underestimating the cost of non-repayable debt with a RAB charge at less than 30%. Now the chickens have come home to roost. The cost is now 54% and the Government want the lowest-paid graduates to bear the cost of bailing them out.
I questioned Michelle Donelan, the Universities Minister, in the Commons today, asking her to rule out this retrospective change:
“The Office for National Statistics reported recently that nearly 40% of first-year students had shown symptoms of depression and anxiety this autumn, and similar numbers felt unprepared for university because of the loss of in-person learning during the pandemic.
“What support is the Government giving stretched universities to ensure that both new and continuing students succeed despite the difficulties that they have faced, and will the Minister take this opportunity to deny rumours that the Government are planning to add to their worries by making graduates on lower incomes pay more of their student debt, by reducing the repayment threshold?”
She responded confirming that Government “will respond to the Augar report shortly”.