"The inquiry will look at all student loan plans but the recent controversy has surrounded Plan 2 loans, which were issued in England between September 2012 and July 2023 and are still issued in Wales. Graduates with Plan 2 loans pay back 9% of everything they earn over the repayment threshold."
"The Chancellor Rachel Reeves announced in November's budget the threshold would be frozen at 29,385 between 2027 and 2030, rather than rising with inflation. That means graduates will start repaying sooner and those earning above the threshold will see a greater proportion of their salary subjected to student loan repayments than they would have done."
"Dame Meg Hillier, chair of the Treasury Committee, said many people had benefited from widened access to higher education through the student loan system, but the inquiry would ask whether 'the goalposts been moved in a way which is unfair to graduates'. Upward interest rates and sometimes particularly high marginal tax rates have clearly led to widespread dissatisfaction among graduates."
The Treasury Committee is investigating student loan repayment terms following public concern about recent policy changes. The inquiry focuses on whether freezing the repayment threshold at £29,385 between 2027 and 2030 is fair to graduates. Plan 2 loan holders pay 9% of earnings above the threshold, and the freeze means graduates will repay sooner with higher proportions of salary affected. The investigation will examine all student loan plans and consider repayment terms alongside broader graduate taxation including income tax. Campaigners seek reversed freezes, lower repayment rates, and reduced interest rates currently set at RPI plus up to 3% based on earnings.
#student-loans #repayment-threshold-freeze #graduate-taxation #treasury-committee-inquiry #higher-education-policy
Read at www.bbc.com
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