Why cutting the student loan interest rate will only help richer graduates… 12 September 2017 at 10:21AM in Martin's blogs & appearances & MoneySavingExpert in the news 2 replies 4.8K views

MSE_Eesha

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "Why cutting the student loan interest rate will only help richer graduates…" Blog.

Please click 'post reply' to discuss below.

Ian_Stuart_Douglas

Martin what you are suggesting is that the only students who will benefit from a reduction in tax are those that do well, on worthwhile courses, that lead to a job that pays well. I thought that is what the economy wants.


I went to University not only for free but also received a grant. I am an engineer, paid well but I pay substantial tax and earn a lot of foreign income for the UK economy, as part of a large organisation. Over the years I am a significant net contributor to the system. Not everyone is so lucky. New colleagues are forced to pay more in proportion in tax than I do and are in employment at a time when pension provisions have been seriously reduced. To ask them to pay 3% + RPI is disproportionate.


I would like to see universities help support the process. As they are income generating businesses, they should be asked to pay a significant element for underpaying individuals, that went on their courses. It would be an incentive for them to ensure students make a positive economic contribution by ensuring that students achieved the best possible outcome on their courses and they provided courses that were worthwhile to employers.

zagfles

Martin, you're right of course. However, this is politics, where it's not financial reality that matters, it's perception.

A loan interest rate of 6.1% sounds high. Therefore Labour and the media have seized on it and used it as a political football to say how nasty the Tories are or to get a sensationalist headline. They aren't interested in the actual effect of the high rate.

Of course, if they were to cut it, then the same hypocrites who were using the high rate as political football will then criticise the cut as something that only benefits the "rich".

More evidence of the urgent need for financial education in schools. Then the gullible public won't get taken in by media and politicians trying to use things like this as political footballs.