In all the furore and discussion in the wake of the Brexit result, you would be forgiven for thinking that there was no other news. At the end of June came the announcement that Parliament would discuss the recent Student Loans petition that they had originally thrown out. Many students past and present have expressed anger and concern about the scheme and how the government has reneged on the promises it made in 2010 to those who applied for student loans.
Behind the Student Loans Petition
Last year, the then Chancellor of the Exchequer George Osborne announced that terms to the present student loan would change. In 2010, there was a lower threshold of £21,000 before students would need to start paying back their loan. The condition was that this would increase every year in line with inflation and in line with cost of living increase.
Yet in 2015, George Osborne threw this out. This meant that as cost of living wages increased, effectively the threshold would go down for new graduates every year. Consequently, students would have to pay more of their loan back earlier than expected. The main complaint was that a commercial business should not be able to alter the terms and conditions of a loan retrospectively.
The Petition
Alex True, a student at Durham and studying finals, started the petition in May. Within a matter of days, it hit 120,000 signatures. The government agreed to debate the petition as required by gov.uk petitions, but prior to this had already set out their vision and objections to the existing scheme. Alex said he hoped that the changes would apply to new students and not to current students retrospectively.
Financial advice website Money Saving Expert calculated that students would end up paying over £300 more each year from 2020. It was not expected that the government would back down when it announced the debate. It took place on 18th July, just before the summer recess.
What Happened At the Debate?
A number of Labour MPs backed the petition and asked the government to look again at the issues it would cause. They said that a shortage of job opportunities means that many students will earn underneath the threshold, but those who will earn lower graduate wages will be hit hardest. The reason is the fluctuating cost of living, low job opportunities and existing debts would mean low income students will struggle to pay off their student loan burden.
MP Helen Jones said that young people felt “betrayed” over being expected to pay for the government’s failure of the student loan system. Low income students will now find heaps of interest payable on top of their loans. This, for the first generation to earn less on average than their parents.
The debate ended with no change, but with a further higher education debate planned, the issue will no doubt come up in The House of Commons again.