"Writing in the Sunday Telegraph, Badenoch said the Plan 2 loans from that period "increasingly feel like a scam". An estimated 5.8 million people took out Plan 2 student loans between 2012 and 2023. Education Secretary Bridget Phillipson said that she intends to look at changing the system as the government faces pressure to reduce student debts, including from some Labour MPs."
"For Plan 2 loans, interest is currently charged at the rate of Retail Prices Index (RPI) plus up to 3%, depending on how much a graduate earns. Badenoch said she would cap the interest charged to RPI only, which is currently 3.8%, arguing it would help a higher number of students pay off their debts. The Conservative leader wrote: "I am horrified at what graduates today are dealing with, and this is one of the reasons millions of young people feel they've been stitched up.""
Kemi Badenoch proposes capping interest on Plan 2 student loans issued between 2012 and 2023 to the Retail Prices Index (RPI) only. An estimated 5.8 million people took out Plan 2 loans in that period. Currently Plan 2 interest is charged at RPI plus up to 3%, varying by graduate earnings. Badenoch argues capping interest to RPI (currently 3.8%) would help more graduates pay off debts and says loans increasingly feel like a scam. Education Secretary Bridget Phillipson said she will examine changes and called Conservative complaints galling because that party introduced Plan 2 and raised tuition fees in 2012. Chancellor Rachel Reeves suggested lowering inflation could reduce repayments.
Read at www.bbc.com
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