Dr Agnieszka Studzińska

This is a very disappointing response that does little to help the millions of students already struggling with student loans! My view on the govt's reponse today to the Treasury Committee student loan report... --------------- This is a very disappointing response that does little to help the millions of students already struggling with student loans, after years of degradation of the terms they signed up to, by successive governments. Most urgently, it doesn’t address the coming immoral freeze of the Plan 2 repayment threshold, announced by Rachel Reeves, due to start next April. That will mean all those on Plan 2 loans will effectively pay more each year. I say it’s immoral because it is a negative retrospective change of terms to loan contracts students, often aged 18, signed up to. No commercial firm would ever be allowed to do that. The only slim hope is that as the freeze was announced in a Budget, it has to be undone in a Budget and therefore they are just waiting for the coming one to do that. At the same time, the Government has sadly rejected the Committee’s recommendation that the ‘fairness’ protections that holders of commercial loans get should apply to student loans too - perhaps as it knows some of the ways it behaves would fall foul of those conditions. Most frustrating is that back in 2015, I campaigned for this change, and even worked with current Cabinet Minister, Wes Streeting, then a backbencher, to put an amendment in Parliament (it failed). So, it is incredibly frustrating to see a government he is now a part of reject it. The Government has also rejected shifting the inflation link from RPI to CPI - continuing the unfair pattern that means when the Government raises our costs by inflation it’s often via the higher RPI, but on things where it pays out it’s often linked to the lower CPI measure. Of course, I welcome the small crumbs it has given that at least future students will be told in plain English, before they sign up, that the amount they repay can be altered after the event. But let’s be clear: better information for future students will not fix the existing Plan 2 student loan crisis. The repayment threshold needs to rise, interest needs to fall, maintenance support needs uprating, and the whole system requires a fundamental reset.