A student-led Government petition calling for ministers to stop a retrospective change to a loan agreement has been praised for quickly passing the important 100,000 signature mark which could see it now be debated in Parliament.
Consumer champion and financial expert, Martin Lewis, who has been fiercely campaigning for the Government to rethink its decision since October last year, congratulated Durham University engineering student, Alex True, for spearheading the “crucial” petition.
Having amassed over 120,000 signatures of support, Mr Lewis said: “It shows there’s real concern among students and parents. I have already engaged lawyers, written to the Prime Minister, and met with Universities Minister Jo Johnson and, at every stage, the Government has pig-headedly refused to budge even a fraction.”
Despite the fact there will most likely be a debate on the issue, Mr Lewis cautioned: “My concern is, even after a parliamentary debate, they’ll put their fingers back in their ears.”
The Government came under heavy criticism and was accused of betraying an entire generation of students after quietly putting out a report on one of the busiest days in UK politics, in November last year, in which it backtracked on a 2012 promise.
The Government had told potential students it would be increasing the £21,000 student loan repayment threshold annually in line with average earnings from April 2017.
However, the Government then decided to make a U-turn on its decision, freezing the threshold until at least 2021, meaning that, instead of it going up each year, it would now be stuck at £21,000, leaving more than two million graduates paying £306 more each year.
Mr Lewis blasted the Tories for “disgracefully” not announcing the change which was “buried” in Chancellor George Osborne’s Autumn Statement last November.
The change was declared despite an overwhelming 95 per cent of respondents to a Government consultation opposing the move.
Calling the change by the Government “a disgrace” that “goes against all forms of natural justice,” Mr Lewis said on Tuesday: “If a commercial company had made retrospective changes to what they’d promised about their loans, they’d be slapped hard by the regulator - the Government shouldn’t be allowed to get away with it either.”
As well as betraying the current generation of students, Mr Lewis said it also fundamentally risks “destroying any trust” future students can have in the system. He asked: “How can we ask young people to sign up to a deal for 30 years with the risk it could be changed again at a minister’s whim - without any legislation?
“We need the terms to be locked into statute.”
A Department for Business, Innovation and Skills (BIS) spokesperson said the student funding system is “sustainable with a relatively high threshold” before borrowers have to repay their loan.
In a statement, the spokesperson added: “It removes financial barriers for anyone hoping to study, and is backed by the taxpayer with outstanding debt written off after 30 years.
“Graduates enjoy a considerable wage premium over non-graduates and repay their loans in line with income - at a rate of nine per cent of earnings above £21,000.
“We consulted on freezing the repayment threshold in 2015, and this decision - along with our wider reforms - is helping to ensure higher education remains sustainably financed and open to all students, irrespective of background.”
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