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| Student loans: fight over 'disgraceful' freeze on income threshold | |
| (35 minutes later) | |
| Calls have been made for the Treasury to unpick a controversial change to student loans from George Osborne’s final autumn statement, which critics including MoneySavingExpert’s Martin Lewis have called a mis-selling of loans to thousands of young people. | Calls have been made for the Treasury to unpick a controversial change to student loans from George Osborne’s final autumn statement, which critics including MoneySavingExpert’s Martin Lewis have called a mis-selling of loans to thousands of young people. |
| Lewis has led the charge to oppose the changes made in 2015: a five-year freeze on the £21,000 income threshold at which borrowings must be paid back, despite a pledge when the scheme was launched that the £21,000 figure would be raised each year in line with average earnings. | Lewis has led the charge to oppose the changes made in 2015: a five-year freeze on the £21,000 income threshold at which borrowings must be paid back, despite a pledge when the scheme was launched that the £21,000 figure would be raised each year in line with average earnings. |
| The consumer expert said he hoped the Labour frontbench would take up the fight if the autumn statement did not reverse the freeze. | The consumer expert said he hoped the Labour frontbench would take up the fight if the autumn statement did not reverse the freeze. |
| “It is absolutely disgraceful, because change going forward is a change of policy but change going backwards is about honesty,” he said. “This is about honesty.” | “It is absolutely disgraceful, because change going forward is a change of policy but change going backwards is about honesty,” he said. “This is about honesty.” |
| The change, vociferously opposed by Lewis and the Labour MP Wes Streeting, a former NUS president, will mean that on average a former student will pay £306 a year more in 2020-21 compared with 2016-17. | The change, vociferously opposed by Lewis and the Labour MP Wes Streeting, a former NUS president, will mean that on average a former student will pay £306 a year more in 2020-21 compared with 2016-17. |
| Lewis told the Guardian he had lobbied both the Treasury and the universities minister Jo Johnson to reverse the freeze in this week’s autumn statement. | Lewis told the Guardian he had lobbied both the Treasury and the universities minister Jo Johnson to reverse the freeze in this week’s autumn statement. |
| “I have tried everything – hiring lawyers, speaking to senior people in No 10, putting in submissions to the autumn statement, debates in parliament, but this is totemic to me,” he said. | “I have tried everything – hiring lawyers, speaking to senior people in No 10, putting in submissions to the autumn statement, debates in parliament, but this is totemic to me,” he said. |
| “This is about how young people can trust politics, when people can retroactively change a contract, if they are lied to in contract? It is an absolute disgrace.” | “This is about how young people can trust politics, when people can retroactively change a contract, if they are lied to in contract? It is an absolute disgrace.” |
| Lewis said he had hoped to see more vocal opposition to the freeze from the Labour party frontbench. | Lewis said he had hoped to see more vocal opposition to the freeze from the Labour party frontbench. |
| “I feel slightly disappointed that I’ve been the official opposition on this,” he said. “I hope they’ll join the fight, and put aside what I think has been the idea, that the whole system is the problem, and that they can now play the current ball rather than the future game.” | “I feel slightly disappointed that I’ve been the official opposition on this,” he said. “I hope they’ll join the fight, and put aside what I think has been the idea, that the whole system is the problem, and that they can now play the current ball rather than the future game.” |
| On Monday night Streeting tabled two amendments to the higher education and research bill, firstly to bar the government from making retroactive changes to student finance without it being looked at by an independent panel, and secondly to bring student loans under regulation of the Financial Conduct Authority. | On Monday night Streeting tabled two amendments to the higher education and research bill, firstly to bar the government from making retroactive changes to student finance without it being looked at by an independent panel, and secondly to bring student loans under regulation of the Financial Conduct Authority. |
| Though Tory MPs defeated the amendments in the Commons, Streeting said he hoped Labour peers will take up the amendments in the House of Lords. | Though Tory MPs defeated the amendments in the Commons, Streeting said he hoped Labour peers will take up the amendments in the House of Lords. |
| “If any commercial bank or pay day lender behaved like this there would be outrage and the FCA would be stepping in,” Streeting said. | “If any commercial bank or pay day lender behaved like this there would be outrage and the FCA would be stepping in,” Streeting said. |
| “But these aren’t regulated by the FCA and so George Osborne decided this was a nice little money saver and drove a coach and horses through the expectations students and graduates had about what they would be paying at what point.” | “But these aren’t regulated by the FCA and so George Osborne decided this was a nice little money saver and drove a coach and horses through the expectations students and graduates had about what they would be paying at what point.” |
| The Labour MP said he hoped that a new regime at the Treasury would be convinced to look again. | The Labour MP said he hoped that a new regime at the Treasury would be convinced to look again. |
| “There’s a serious issue about trust here: if students are being promised the threshold will go up, and it doesn’t, what’s to stop current or future students finding suddenly the interest rates goes up, or debts aren’t written off after 30 years, like they were promised?” he said. | “There’s a serious issue about trust here: if students are being promised the threshold will go up, and it doesn’t, what’s to stop current or future students finding suddenly the interest rates goes up, or debts aren’t written off after 30 years, like they were promised?” he said. |