Thousands of young people received their A-level results on 17 August 2017, but they face an increasingly difficult financial future.
There was speculation after Commons Leader Andrea Leadsom said the Department for Education might “consider” looking at rising student debt. But even after a Tory backbench revolt, Theresa May failed to deliver. And on 15 August, the Student Loans Company announced that interest repayments will rise for all loans taken out after 2012.
Hitting poor students
The National Union of Students (NUS) recently identified that:
Currently students from the poorest 40% of families are emerging with the highest debts of £57,000
Thanks to the Tories, interest on that debt has now soared. From 1 September, the interest on student loans will increase to 6.1%.
Concerns about these changes are well founded. As Amatey Doku, the NUS Vice President for Higher Education, told The Canary:
The government’s decision to press forward with 6.1% interest rates on student debt reaffirms their misguided commitment to an education funding system which is both deeply flawed and rapidly losing public support. The government’s willingness to continually add to the burden of student debt, and change the terms of repayment, is indicative of a complete disregard for the concerns of students, their families, and the tax payer who will have to cover the cost of unpaid debt.
Repayment for student loans starts after graduation, once income from employment reaches £21,000. It’s currently estimated that most graduates will be left more than £50,000 in debt.
But what doesn’t seem to be widely acknowledged is that these repayments effectively put them into the highest tax bracket. On earnings over £21,000, graduates will pay 20% income tax, 12% national insurance, and 9% student loan repayment. That’s 41%.
This means graduates now pay more tax than those who earn over £45,000.
The shift from student grants to loans was slow. But in 2010 – following the Browne Report – the Coalition government pushed through controversial tuition fees. Under a Tory government, further changes have been relentless. This latest rise in interest rates is, as Doku told The Canary, the final straw:
It seems that the government is bent on covering their ears and humming loudly to block out the critics as they continue to make an already flawed education funding system worse. I am imploring them to join the conversation: education funding needs to be reviewed in its entirety to ensure that no one is penalised simply for wanting an education.
There is a strong feeling that the government is not listening to young people. In contrast, Jeremy Corbyn said at a rally in Cornwall that Labour promises to give:
young people some degree of hope and an education with no debt
Even May’s former adviser Nick Timothy has used his column in The Telegraph to criticise May and the Tories. He said [paywall]:
University fees are a pointless ‘Ponzi scheme’ which are ‘blighting young people’s futures’ and must be radically reformed…
This comes as a surprise because there was no mention of addressing tuition fees in the Tory manifesto, which Timothy helped to write.
Opportunities to engage in education are vital for the future. Students are also the next generation of nurses, doctors and teachers. As Doku made clear to The Canary:
Education and an educated workforce is a vital part of a healthy, functioning society: to penalise those who further their education is seriously counter-productive.
But with the Tories in power, we need to ask: what does a future cost?
– Support The Canary if you appreciate the work we do.
– Write to your MP about the rise in student debt.
Featured image via YouTube
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