Ministers are reportedly planning to lower the wage level at which graduates start repaying their student loans, a move that has already prompted opposition MPs to accuse the Conservatives of “widening the gap” for workers to low income.
Chancellor Rishi Sunak would like to revisit student funding in his spending review ahead of the October budget, according to the Financial Time, on Treasury concerns that the taxpayer is paying too high a bill for college courses.
Currently, graduates start repaying their loans when they earn £ 27,295 or more, but an anonymous minister told the newspaper “the plan” was to reduce that figure – estimates appearing to suggest the government wants to go back below the £ 25,000 mark.
The Augar 2019 review of education after 18 recommended that the threshold be lowered to £ 23,000 while the Higher Education Policy Institute think tank this year modeled a reduction to less than £ 20,000.
No final decision has yet to be made, but a minister told the FT a threshold of £ 20,000 was considered “a little low”.
The news comes at a particularly tense time for graduates earning the current threshold of £ 27,295, who, after the recent introduction of the healthcare and social services tax, were told they would pay a rate of Marginal taxation of at least 42.25% when national insurance (NI) costs increase – 33.25% for non-graduates.
For those earning over £ 50,270, the rate is 52.25%, which equates to 43.25% for non-graduates earning up to £ 100,000.
Matt Western, Labor MP for Warwick and Leamington, tweeted the development and criticized the Conservative Party for “driving the wedge” between the working class and the rich.
“Widening the Gap: Government plans to lower student loan repayment threshold to £ 20,000, which will have a harder impact on female graduates, those with lower and middle incomes who will ultimately pay c. £ 10,000 more, ”he said.
“But rich students would hardly be affected! “
Meanwhile, a math professor has lashed out at the government for its failure to protect workers like her from the latest cost-of-living crisis.
“Fully aware that I am very privileged compared to many in the company”, Bec Greenhalgh, who works in Manchester, noted. “BUT raising NI and lowering the salary threshold for student loan repayment coupled with a freeze on teacher salaries is not what I had in mind when I accepted my mortgage offer. “
A spokesperson for the Ministry of Education (DfE) said The independent The student loan system was “designed to ensure that all who have the talent and desire to pursue higher education can do so, while ensuring that the cost of higher education is fairly distributed among graduates and the taxpayer “.
He also said that the DfE continued to carefully review “the recommendations made by the Augar panel”.
The National Union of Students has said it will be “totally opposed” to any cuts. “The injustice is simply astounding,” Hillary Gyebi-Ababio, vice president of higher education, told reporters. FT.
In 2017, the student loan repayment threshold was significantly lower than it is now – until then Prime Minister Theresa May announced changes in October. The ex-conservative leader has increased the level of salary reimbursement from £ 21,000 to £ 25,000, before it finally becomes the figure of £ 27,295, it is now in April of this year under Boris Johnson.
The average student debt on graduation day in England is estimated to be over £ 45,000 in maintenance and tuition loans, which are paid back to the government with additional interest through a reduction of 9% of income and amortized after 30 years.
Another disgruntled social media user Sam called ministers ‘scum’ after seeing the news – hours after Deputy Labor Party leader Angela Rayner defended calling Mr Johnson’s government la same thing.
“Absolutely sinister” Sam wrote. “Increase NI and now this. Coupled with rampant inflation and unaffordable housing. Attack the younger generations because they are too afraid to tax their donors.