Scrap student loans ‘barrier’ to university, Tower Hamlets mayor demands
- Credit: Mike Brooke
Student tuition fees leading to lifelong debt are putting school-leavers off going to university and must be scrapped, the Mayor of Tower Hamlets is demanding.
John Biggs is urging the government to end the system where debts racked up by graduates on their loans are set to hit £8.6billion by 2024.
"Tuition fees are pricing many young people out of education," he said. "The loan debt is falling on the taxpayer to pick up the tab.
"The system is broken and it's time for a fundamental change.
"This is an anxious time of year for pupils getting their exam results and making important decisions about their future. But the tuition fees policy is discouraging them from fulfilling their potential."
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The East End had the highest rate of child poverty in the country, he points out. Many school-leavers were being dissuaded from applying for university places because of the prospect of lifelong loan repayments with high interest rates.
The council's cabinet member for work and the economy, Motin Uz-Zaman, said: "Young people are facing sky-high fees and are starting off their working lives with enormous debts.
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"They should be able to make choices about their next steps on what's right for them, not what they can afford. We need fairness in the system which is why we're calling for tuition fees to be scrapped."
Student loan debt will hit £8.6bn by 2024, double what it is today. Fewer than a fifth of graduates are able to pay back their student loans in full, Institute for Fiscal Studies estimates have found.
But the Department for Education denies the loan system burdens graduates with debt. It forecasts only 30pc undergraduates starting in 2018-19 will repay their loan in full, or 70pc of those studying for their Master's degree.
A Whitehall spokesman said: "Repayments are based on income after graduation, not on interest rates or amount borrowed, and any outstanding amounts are written off."
The top 6.3 per cent interest rate on student loans, which is double the Retail Price Index, is being reduced this month to 5.4pc. It is charged to graduates earning more than £41,000. The salary threshold from next April where repayments start is £26,575, rising in line with inflation.