The government has a “moral obligation” to reverse the student loan repayment threshold freeze made in last year’s budget, MPs have said, after finding that loans have been promoted to students in “deeply problematic” ways.
A report from the House of Commons’ Treasury select committee, published on 7 June, describes the student loan system as “unfair” and warns that the government must fix it to avoid further disillusionment among students and graduates.
Recommendations include abandoning the use of the Retail Prices Index (RPI) to calculate loan interest rates, ensuring parity between the amount students and the state contribute towards the cost of a degree, and to explicitly warn all new loan holders that the terms can be changed retrospectively.
Most strikingly, the committee has called on the Treasury to reverse the three-year freeze to the repayment threshold imposed in last year’s autumn budget.
It noted that successive governments have frozen the repayment threshold “despite repeated commitments…when the loans were taken out that that would not happen”.
