Labour’s new policy on student loans has come after outrage online prompted a campaign in the media and Tory promises to take action. The DfE says the interest rate on Plan 2 and Plan 3 student loans will be capped at 6% from September. It’s currently an interest rate of RPI +3% while they are studying…
- Plan 2: undergraduate courses and Postgraduate Certificates of Education (PGCE) from September 1 2012 in Wales and September 1 2012-July 31 2023 in England.
- Plan 3: postgraduate master’s or doctoral courses.
Skills minister Jacqui Smith said: “We know that the conflict in the Middle East is causing anxiety at home, and while the risk of global shocks is beyond our control, protecting people here is not. Capping the maximum interest rate on Plan 2 and Plan 3 student loans will provide immediate protection for borrowers, supporting those who are most exposed within this already unfair system. We’re acting now to defend against the consequences of far-away conflicts in an uncertain world.” Pushed into it again…
UPDATE: Tory response. Laura Trott, Shadow Education Secretary, said:
“Labour are tinkering around the edges, while graduates will still be paying interest above inflation. These proposals do not go far enough and they confirm Labour have no serious plan to stop graduates being ripped off.
“Our New Deal for Young People will scrap real interest on student loans. We will double apprenticeships and put an end to dead-end degrees, so young people have a real choice about their future when they leave school.
“Under Labour, graduates are mired in debt with fewer prospects than ever before because of Rachel Reeves’ choices. Her decision to freeze repayment thresholds means young people are paying more, and paying it sooner, all while they have fewer opportunities.”
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