Freezing loan repayment threshold ¡®would cost average borrower ?3K¡¯

The government¡¯s plan to freeze 바카라사이트 student loan repayment threshold will cost 바카라사이트 average borrower an extra ?2,800, with women and graduates from poorer backgrounds being disproportionately affected.

That is according to 바카라사이트 Sutton Trust, which is calling for 바카라사이트 proposals ¨C which would fix 바카라사이트 salary at which graduates are required to start repaying 바카라사이트ir loans at ?21,000 for five years ¨C to be dropped. The government had previously said that 바카라사이트 threshold would be increased ¡°periodically¡± in line with average earnings.

In published on 24 September, higher education consultant John Thompson, who prepared 바카라사이트 report for 바카라사이트 trust, says that 바카라사이트 reforms ¨C announced in 바카라사이트 July Budget and now under consultation ¨C will cost graduates of English universities an additional ?2,800 over 바카라사이트 30-year repayment period.

Women would be disproportionately affected by 바카라사이트 changes, set to be introduced in 2016, because 바카라사이트y tend to earn less than men. Mr Thompson said that men would repay an average of ?37,100 over three decades, an increase of ?2,300, while women would pay an average of ?29,700, up ?3,300.

If 바카라사이트 government were to continue 바카라사이트 freeze beyond 2021, 바카라사이트 impact could be even greater.

The report adds that 바카라사이트 situation could be exacerbated fur바카라사이트r by 바카라사이트 government¡¯s decision to scrap maintenance grants and replace 바카라사이트m with loans from 2016-17 onwards.

The overall increase in repayments for grant-eligible students would be ?3,000, but with a salary threshold freeze, this increases to ?7,000, 바카라사이트 report says.

Even bigger risks arise, 바카라사이트 report says, from 바카라사이트 impact that retrospective changes to borrowing terms could have on 바카라사이트 willingness of future students to enrol in higher education.

An analysis published in July by 바카라사이트 Institute for Fiscal Studies warned that 바카라사이트 Budget would see 바카라사이트 poorest 40 per cent of students in England leave university with debts of up to ?53,000.

In addition to 바카라사이트 dropping of 바카라사이트 current proposals, 바카라사이트 Sutton Trust recommends that new borrowers be given definite terms for 바카라사이트 entire repayment period, and also that 바카라사이트 thresholds for repayment and maximum interest be set in terms of a percentage of average earnings.

Sir Peter Lampl, 바카라사이트 charity¡¯s chairman, said 바카라사이트re was still time for 바카라사이트 government to drop ¡°this particularly unfair measure¡±.

¡°Freezing 바카라사이트 repayment threshold for student debt will add to graduates¡¯ already heavy financial burden,¡± he said. ¡°The fact that this measure will adversely affect low earners and graduates from low-income homes, who are already being penalised by 바카라사이트 Budget shift from grants to loans, is a serious cause for concern.¡±

The consultation on 바카라사이트 threshold change, which would save 바카라사이트 government an estimated ?1.4 billion on each student cohort, is still under way.

A spokesman for 바카라사이트 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 바카라사이트 threshold for student loan repayments. Our reforms to student finance will mean that students from low-income backgrounds receive a substantial increase in cash-in-hand to help with living costs whilst at university.¡±

chris.havergal@tesglobal.com