Further Worrying News about 2012 Student Loans

setmefree2

Business Secretary Sajid Javid said last month that he could not commit the government to a promise that the repayment rate on student loans will not be retroactively increased within this parliament.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/loans/11977775/Calculator-paying-down-your-student-loan-early-could-save-over-20000.html

This means the government could increase the repayment rate from the current 9% to (say) 10%.

A repayment rate increase would mean more people being able to pay off their student loan within 30 years, and significant extra payments for those who can’t. As a result, depending on the individual situation, the debt amount could become significantly more important.
So in the event of a repayment rate rise, making voluntary payments early on could save money over the life of the loan.

For a repayment rate increase to 10pc of the amount earned over £21,000, for the same £40,000 debt scenario described above, the individual would pay back £70,500 over 30 years, paying off the loan in full.
However, if they were to voluntarily pay £125 per month (£1,500 annually) towards the loan from their first year of working, they would pay back £50,500 over 17 years, saving £20,000.

popadom

I don't understand how a government could do this legally? Surely it would set a precedent in law? I couldn't take out a mortgage and agree to pay £100 a month and then change my mind ten years later and decide to pay only £70. I would be taken to court.