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You can find the current article at its original source at https://www.theguardian.com/education/2017/sep/10/cutting-student-loans-interest-rate-would-only-benefit-better-off-says-tory-thinktank
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| Version 1 | Version 2 |
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| Thinktank warns Tories not to cut interest rates on student loans | Thinktank warns Tories not to cut interest rates on student loans |
| (4 months later) | |
| Bright Blue says measure being considered in Downing St to woo younger voters would only benefit better off graduates | |
| Heather Stewart | |
| Sun 10 Sep 2017 19.39 BST | |
| Last modified on Mon 27 Nov 2017 17.15 GMT | |
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| A prominent Conservative thinktank is warning Philip Hammond against giving high-paid graduates a handout by cutting the interest rates on student loans in a bid to win over younger voters. | A prominent Conservative thinktank is warning Philip Hammond against giving high-paid graduates a handout by cutting the interest rates on student loans in a bid to win over younger voters. |
| The chancellor’s autumn budget is regarded by senior Tories as a key moment for the government to demonstrate that it has heard the concerns of voters during the election campaign, when Labour’s pledge to slash tuition fees helped boost Jeremy Corbyn’s popularity. | The chancellor’s autumn budget is regarded by senior Tories as a key moment for the government to demonstrate that it has heard the concerns of voters during the election campaign, when Labour’s pledge to slash tuition fees helped boost Jeremy Corbyn’s popularity. |
| Cutting the interest rates on outstanding student debt is one measure under consideration in Downing Street, but the thinktank Bright Blue, which counts more than 100 Conservative MPs among its backers, said that would only benefit the better off. | Cutting the interest rates on outstanding student debt is one measure under consideration in Downing Street, but the thinktank Bright Blue, which counts more than 100 Conservative MPs among its backers, said that would only benefit the better off. |
| Ryan Shorthouse, the thinktank’s chief executive, said: “The Conservative government needs to and should make a big offer to young people. But reducing tuition fees or reducing the interest rate on student loans would only benefit high-paid graduates.” | Ryan Shorthouse, the thinktank’s chief executive, said: “The Conservative government needs to and should make a big offer to young people. But reducing tuition fees or reducing the interest rate on student loans would only benefit high-paid graduates.” |
| Instead, he called for the government to raise the earnings threshold at which graduates start to repay their loans – currently set at £21,000 a year, but due to be frozen until 2020. | Instead, he called for the government to raise the earnings threshold at which graduates start to repay their loans – currently set at £21,000 a year, but due to be frozen until 2020. |
| “This would mean all young people repaying student loans would pay a smaller amount from their salaries each month. It would effectively be a tax cut for graduates,” he said. | “This would mean all young people repaying student loans would pay a smaller amount from their salaries each month. It would effectively be a tax cut for graduates,” he said. |
| Hammond told the Conservative backbench 1922 committee last week he wanted to do something to help young people burdened with debt, and asked MPs to submit 250-word suggestions via his parliamentary aide Kwasi Kwarteng. | Hammond told the Conservative backbench 1922 committee last week he wanted to do something to help young people burdened with debt, and asked MPs to submit 250-word suggestions via his parliamentary aide Kwasi Kwarteng. |
| The universities minister, Jo Johnson, has defended the higher education funding system since the election campaign, when the strength of feeling about the debt burden and high interest rates, which can be above 6% for some students, became clear. | The universities minister, Jo Johnson, has defended the higher education funding system since the election campaign, when the strength of feeling about the debt burden and high interest rates, which can be above 6% for some students, became clear. |
| Johnson wrote in the Guardian in July: “We will continue to look at the details of the student finance regime to ensure it remains fair and effective. But getting rid of fees does little to help young people: indeed, by reducing access to education, by damaging the viability of our universities, and by piling tens of billions on to the national debt, it does precisely the opposite.” | Johnson wrote in the Guardian in July: “We will continue to look at the details of the student finance regime to ensure it remains fair and effective. But getting rid of fees does little to help young people: indeed, by reducing access to education, by damaging the viability of our universities, and by piling tens of billions on to the national debt, it does precisely the opposite.” |
| Research by the Institute for Fiscal Studies suggests three-quarters of graduates will not pay off their loans in full, even if they continue making payments into their 50s. | Research by the Institute for Fiscal Studies suggests three-quarters of graduates will not pay off their loans in full, even if they continue making payments into their 50s. |
| Labour will continue to press for outright abolition of fees – one of the flagship measures in Corbyn’s manifesto. | Labour will continue to press for outright abolition of fees – one of the flagship measures in Corbyn’s manifesto. |
| The shadow education secretary, Angela Rayner, said: “Burdening young people with a lifetime of debt is neither fair nor sustainable. We have long called for action to reduce the burden of debt faced by students, in particular those from the most disadvantaged backgrounds, but time and again the Tories have refused to listen.” | The shadow education secretary, Angela Rayner, said: “Burdening young people with a lifetime of debt is neither fair nor sustainable. We have long called for action to reduce the burden of debt faced by students, in particular those from the most disadvantaged backgrounds, but time and again the Tories have refused to listen.” |
| Student tuition fees are one of the issues the government is being urged to tackle in order to win back younger voters, alongside the lack of affordable housing, public services cuts, and income inequality. | Student tuition fees are one of the issues the government is being urged to tackle in order to win back younger voters, alongside the lack of affordable housing, public services cuts, and income inequality. |
| Theresa May’s former chief of staff, Nick Timothy, recently referred to the existing student loan system as an “unsustainable Ponzi scheme”. | Theresa May’s former chief of staff, Nick Timothy, recently referred to the existing student loan system as an “unsustainable Ponzi scheme”. |
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| Students | |
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