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Student loan advice
Comments
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Can you think of an example of the government tearing up a contract with a taxpayer?
Speaker: "Order! The Minister for Tearing Up Contracts"
Minister for Tearing Up Contacts: "I realise there has been some concern expressed about our proposals for varying the terms of historic student loans, but we must face the realities of the situation. The people taking out these historic loans did so at the time of the Great Banking Crisis and Brexit, we are now in very different times. These people had the advantage of an education which was not available to their parents, have benefitted from low interest payments on their loans over an extended period of time. Many are now in very well paid jobs, including if I may say the benches opposite. We are now at a point where some of the highest earners in society are having their loans cancelled whilst those youngsters coming from less well off families today are unable to take advantage of educational opportunities because of the sustained losses of the student loans companies. These proposals simply mean asking well paid beneficiaries of historic loans to repay what they owe, rather than expecting the taxpayer and the youth of today to pick up the bill."
The whole House: "Hear! Hear!"
Cue much tearing of contracts.
Its the way government has always worked and always will. If the number of people who agree, or don't care, exceeds the number of people who don't agree then it will happen. The holders of 'historic' student loans will always be a minority - a bit like the women who spent the majority of their life thinking they would be getting a state pension at 60."In the future, everyone will be rich for 15 minutes"0 -
Speaker: "Order! The Minister for Tearing Up Contracts"
Minister for Tearing Up Contacts: "I realise there has been some concern expressed about our proposals for varying the terms of historic student loans, but we must face the realities of the situation. The people taking out these historic loans did so at the time of the Great Banking Crisis and Brexit, we are now in very different times. These people had the advantage of an education which was not available to their parents, have benefitted from low interest payments on their loans over an extended period of time. Many are now in very well paid jobs, including if I may say the benches opposite. We are now at a point where some of the highest earners in society are having their loans cancelled whilst those youngsters coming from less well off families today are unable to take advantage of educational opportunities because of the sustained losses of the student loans companies. These proposals simply mean asking well paid beneficiaries of historic loans to repay what they owe, rather than expecting the taxpayer and the youth of today to pick up the bill."
The whole House: "Hear! Hear!"
Cue much tearing of contracts.
Its the way government has always worked and always will. If the number of people who agree, or don't care, exceeds the number of people who don't agree then it will happen. The holders of 'historic' student loans will always be a minority - a bit like the women who spent the majority of their life thinking they would be getting a state pension at 60.
Is there somewhere in there an example of a government tearing up a contract with a taxpayer? Or is it all just wind?Free the dunston one next time too.0 -
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Surely the point is that the government normally never needs to tear up a contract, a simple change of law overrides most forms of contract in any case.
OK, then cite a few changes of law that just swept contracts away.
Real contracts, mind, not invented ones.Free the dunston one next time too.0 -
The point with the student loan contract is that changing the terms (most of which are set out in regulations, i.e. law) is simply exercising the flexibility explicit in the contract. It's categorically not tearing it up.
The contract states you must repay your loan in line with the regulations that apply at the time the repayment is due, and as they are amended. The regulations may be replaced by subsequent regulations.
This flexibility is what allowed the Government to simply set down the threshold for post-2012 loans at a value of £21,000 from 2016 without including anything about its future value, as they didn't need to - they knew they could amend the regulations (and therefore the threshold) later. So freezing it didn't even change the terms, leaving Parliament powerless to even block it.
The repayment regulations for student loans are secondary legislation. This type of legislation is either subject to the negative procedure (i.e. it passes into law unless an MP objects and forces a vote against it) or the affirmative procedure (i.e. where a majority vote is needed for it to pass into law - as is the case with tuition fee increases). The repayment regulations are subject to the negative procedure so no vote is needed for them to become law and no vote is needed for amendments to the regulations. All that can stop changes to terms is if a vote is forced against the regulations (called 'praying against' the regulations).0
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