NUS slams “brutal” student loan interest rate hike
University graduates in England and Wales who took out a loan after 2012 are set to be hit with a massive hike in interest rates on their student loans. Analysis from the Institute for Fiscal Studies (IFS) suggests that higher earning graduates will face an increase in the interest accrued on their loans from 4.5 per cent to 12 per cent from September. Lower earning graduates will see their interest rate rise from 1.5 per cent to 9 per cent. The highest earning graduates will be set to incur £3,000 in debt over the course of six months on a loan balance of £50,000.
Loans taken out after 2012 are linked to the Retail Price Index (RPI) measure of inflation, with graduates paying RPI plus 3 per cent in interest on their loans. The RPI is a higher rate of inflation than the Consumer Price Index (CPI), with the former including additional costs in its calculation, including housing.
The National Union of Students (NUS) has slammed the hike in interest rates. NUS Vice President for Higher Education Hillary Gyebi-Ababio said the increases are “brutal” and will deter students from going to university. Gyebi-Ababio said,
These figures are brutal. Increasing the maximum interest rate on student loans to 12% will deter thousands of students from going to university, and will cause unparalleled uncertainty for the millions of graduates already repaying their loans with thousands of pounds added to their debt sheet.
Students aren’t cash cows, and we can’t keep taking the brunt of this government’s regressive actions that have left millions exposed to hardship. Education is a right for all, not a product that can be bought and sold for individual gain. The Government must immediately commit to reversing these planned changes.
These sentiments were echoed by the Young Greens – the official youth and student wing of the Green Party of England and Wales. Young Greens co-chair Jane Baston told Bright Green,
These increases in student loan interest rates, alongside no real-time uplift in maintenance loans and the changes to the student loan system for new borrowers show how determined the Tories are to keep education marketised and extract as much as they can from young people.
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Image credit: Socialist Appeal – Creative Commons