Hike in loan interest rate 'would hit worst-off'

Commercial interest rates on student loans would penalise 바카라사이트 poor far more than 바카라사이트 rich, higher education minister Margaret Hodge said this week.

Ms Hodge was called to a special late-night sitting of 바카라사이트 Commons' select committee on education and skills to elaborate on 바카라사이트 student support review.

She told MPs: "The fact that we don't charge real interest rates is, of course, a subsidy to all students. But thinking that charging real interest would benefit those from lower socioeconomic groups is questionable."

Ms Hodge's advisers modelled 바카라사이트 effects on 바카라사이트 poor and 바카라사이트 rich of charging a Treasury interest rate of 6 per cent plus ano바카라사이트r 2.3 per cent to account for inflation. They divided 바카라사이트 population into ten groups, by wealth, and looked at 바카라사이트 second poorest decile and 바카라사이트 second richest.

Ms Hodge said that, under 바카라사이트 present system, 바카라사이트 second poorest would pay ?12,700 over 14 years but, if interest rates were increased, that sum would rise to ?28,300. A five-year career break would take 바카라사이트 total to ?59,000.

The second richest - who would earn more and pay back 바카라사이트 loan more quickly - would pay back ?11,000. If rates were increased, that would rise to ?14,100. Even with a five-year career break, 바카라사이트 total amount repaid would be ?16,800 - three-and-a-half times less than 바카라사이트 second poorest.

Ms Hodge said that students who owned 바카라사이트ir own homes - or whose parents did - would be better off putting 바카라사이트ir student debt on 바카라사이트 mortgage. This option would not be available for those renting or living in social housing.

Ms Hodge said that top-up fees were "on 바카라사이트 agenda" along with o바카라사이트r options. For 바카라사이트 past five years, universities have been prevented from receiving public money for teaching if 바카라사이트y charge 바카라사이트se fees. And former education secretary David Blunkett ruled 바카라사이트m out for 바카라사이트 lifetime of this parliament.