The repayment
rate on existing student loan debt could be increased by the Government within
the next few years, the Business Secretary has confirmed.
Sajid Javid said
he could not rule out retroactively increasing the amount graduates had to pay
out of their salary before the next election.
Graduates
currently pay 9 per cent of their income above a £21,000 repayment threshold,
but the Business Secretary said the threshold or repayment rates might have to
go up to stop budget pressures getting “out of control”.
The minister
appeared on Wednesday in front of Parliament’s Business, Innovation and Skill
Committee, which scrutinises university funding.
Labour MP Paul Blomfield asked Mr Javid
whether he had “any intention of changing either the threshold or the interest
rates within the lifetime of this parliament”.
Mr Javid replied
that he could not “commit” to such a pledge.
“I can’t tell
you here and now that any of those numbers I’ve mentioned [repayment rate,
repayment threshold, length of loan] can’t change during the life of this
parliament but there are no current plans. It’s something that I just don’t
think I can commit the government to,” he replied.
“In terms of
what’s going to be uppermost in our mind in making these types of decisions is
just making sure at all times what we have set up … is sustainable for the long
term: the RAB charge doesn’t come out of control, and also that it doesn’t in
some way, that if we did have a change it ends up capping the number of
students.”
The “RAB charge”
is the Government’s estimate of the portion of student loan
expenditure that will never be repaid by graduates.
Source:http://www.independent.co.uk/news/uk/politics/student-loan-repayment-rate-could-go-up-in-the-next-few-years-government-confirms-a6694116.html
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