Government fails to honour student loan promise

Former_MSE_Guy

This thread is to discuss the following news story:

Government fails to honour student loan promise

Scrilla

SLC wrote:

The repayment threshold will also remain at £15,000 for the next 12 months. Had the Government used a negative RPI rate to calculate this, the threshold would have reduced and borrowers would have started repaying earlier and ended up paying more. Setting interest at 0% has prevented this from happening.

What about the positive RPI that was being used for previous years? Surely, if the justification for not setting a negative interest is that it would lower the repayment income threshold, then a positive RPI over the years would have meant the repayment threshold year on year would have increased?

As to borrowers repaying earlier, costing more, yes it would, taking into account negative inflation. But by using inflation in this respect to justify not repaying earlier, it conveniently overlooks the fact that setting an interest rate above the actual RPI means borrowers are paying more regardless.

SLC_spokeswoman wrote:

The decision (on 1998-onward loans) has been taken because loans are already well subsidised, and it would be difficult to justify to taxpayers a situation whereby students take out loans in 2009/10 and their balances are immediately reduced.

The last time I looked, the borrowers making repayments are taxpayers too!

Although I disagree with the SLC's justification I personally can't argue with a 0% interest rate. I did and still maintain that the CPI would be a better measure of inflation (currently at 2.9%) to use for things like student loans as it is an index more representative of the spending habits of a student or someone just out of university. So using CPI would have benefitted students in the past, but will go against them in the current climate.

Sol00

Scrilla wrote: »

The last time I looked, the borrowers making repayments are taxpayers too!QUOTE]

Good point.

PeterDuckett

Right if this is true which it is, I have been mis sold my loan on the premise i have been lied to. Could the students lurch a test case based on the same premise of PPI reclaiming?

ILW

PeterDuckett wrote: »

Right if this is true which it is, I have been mis sold my loan on the premise i have been lied to. Could the students lurch a test case based on the same premise of PPI reclaiming?

Only if they sober up for long enough.

digitaldai

There is a petition at number 10 online, but I can not link it as i am not allowed!

busiscoming2

digitaldai The only petiton I could find is to prevent uni's charging higher tuition fees.

BruceyBonus

cmck100 wrote: »

If you go to the number 10 petition website, I found it by searching for student loan. It's called: 'Petition to: Decrease Student Loans in-line with RPI Inflation as promised.'
Already 115 signatories.

This is the direct link to the petition: http://petitions.number10.gov.uk/decreaseloans/

Robinmsa

This is an interesting one.

Fortunately for myself, my loan is pre 1998. But I do feel strongly about how this has been dealt with, the post 1998 loans just been zero% they should infact be -0.4%. As I believe is in your contract.

I have also signed the petition 127 signitures at the moment...

Robin

Rafter

As RPI inflation is down purely as a result of mortgage interest rates dropping and CPI is still significantly above the Bank of England target, this seems totally reasonable.

What would be fair though is if the -0.4% lost this year is knocked of in future years when the RPI inflation rate goes positive again.

R.

toontastic

BruceyBonus wrote: »

This is the direct link to the petition: http://petitions.number10.gov.uk/decreaseloans/

No offence but I've yet to see a government petition on anything important ever make a difference.