"Kemi Badenoch has said the Conservatives would scrap the unfair debt trap of high interest rates on student loans, piling pressure on Labour ministers to tackle the growing outrage over the high costs. The education secretary, Bridget Phillipson, admitted the system of plan 2 loans had problems but suggested the government's priority would be maintenance grants for poorer students, rather than tackling the high interest rates."
"The Conservatives said they would abolish real interest rates on plan 2 student loans, which can mean graduates pay tens of thousands more than they borrowed to fund university fees. The shadow education secretary, Laura Trott, said the loans should not rise faster than RPI inflation, which would cut the size of the loans for millions of graduates who started courses after 2013."
"Leaving university has become a moment of despair. Not just for young people but their parents too. In particular, the plan 2 student loans are an unfair debt trap: millions of graduates are doing the right thing, paying every month, yet watching the balance they owe growing bigger because interest piles on faster than repayments. If Labour had any sense, Rachel Reeves would act now and use her spring statement to adopt this plan."
Conservatives propose abolishing real interest rates on plan 2 student loans, arguing many graduates end up owing far more than they borrowed. Labour’s education secretary acknowledged problems with plan 2 but prioritized maintenance grants for poorer students over changing interest rates. The shadow education secretary recommended capping loan rises to RPI inflation and funding reforms by cutting courses judged to lack value for money. Campaigners and opposition figures link high student loan costs with worsening youth outcomes, including rising youth unemployment and low graduate recruitment. Calls increased for urgent policy action and for Chancellors to address loan thresholds and interest rules.
Read at www.theguardian.com
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