Girls and poorer students will pay back £1000 more to student finance
Those who earn less will suffer more
Girls and working class students will be hit hardest by student finance changing the way you pay back your loan, according to new figures.
Currently we repay loans for tuition fees and maintenance once we earn £21,000 – and George Osborne wants to keep it this way for five years.
This means we will end up paying a staggering extra £2,800 over 30 years, claim education charity The Sutton Trust.
But they warn girls and students from poorer backgrounds will be hit harder than boys, paying back over £1000 more because they earn less.
The Sutton Trust report says freezing the loan repayment threshold – alongside other changes such as replacing maintenance grants for poorer students with loans – will hugely increase the cost of going to uni.
The study worked out that the overall extra repayment for a typical student taking out a loan of £36,000 over three years would rise by £2,800 over 30 years.
What’s more, the new plans would have a worse effect on girls.
If the five-year repayment threshold freeze was introduced, a typical male borrower would pay £37,100 – £2,200 more – over 30 years, while the typical female borrower would repay £29,700 – £3,300 more.
Those from less wealthy backgrounds will be affected worst because of the scrapping of maintenance grants, and average debt could rise to more than £50,000, according to The Trust.
Sir Peter Lampl, chairman of the Sutton Trust, said: “The fact that this measure will adversely affect low earners and graduates from low income homes, who are already being penalised by the budget shift from grants to loans, is a serious cause for concern.”
The University and College Union general secretary, Sally Hunt, said: “This report is a timely example of how the government’s reforms to university fees are going to hit the poorest the hardest.
“We need to be looking to find ways to encourage the brightest people into university, not putting up ever greater financial barriers.
“The time has come for a proper rethink of the whole system, otherwise we risk pricing brilliant students out of university and saddling talented graduates with life-changing levels of debt.”
A spokesman for the Department for Business, Innovation and Skills said: “We want our world-class higher education system to remain financially sustainable and welcome responses to our current consultation on the threshold for student loan repayments.
“Our reforms to student finance will mean that students from low-income backgrounds receive a substantial increase in the cash-in-hand to help with living costs whilst at university.”