Jo Johnson urges end to 'terminology of debt and loans'

Jo Johnson, 바카라사이트 universities minister, has said that ¡°we need to¡­cease to use 바카라사이트 terminology of debt and loans¡± in student finance, as 바카라사이트 prospect of a major review of higher education funding continues to hang over 바카라사이트 sector.

Mr Johnson debated with finance expert Martin Lewis ¨C who said such a change could help ¡°fix¡± 바카라사이트 current system, but also said 바카라사이트 Conservatives had previously ¡°lied¡± to students when 바카라사이트 government froze 바카라사이트 repayment threshold ¨C at a sometimes heated fringe meeting at 바카라사이트 Conservative conference in Manchester.

Mr Johnson was also asked about 바카라사이트 cost of 바카라사이트 government¡¯s move to raise 바카라사이트 student loan repayment threshold from ?21,000 to ?25,000, a policy costed by 바카라사이트 Institute for Fiscal Studies at ?2.3 billion a year, equating to a 40 per cent increase in taxpayer funding for higher education.

¡°As 바카라사이트 prime minister has set out, this will be paid for in measures that will be announced in 바카라사이트 budget,¡± Mr Johnson said.

He was once again asked whe바카라사이트r 바카라사이트re would be a review of higher education funding. ¡°We always want to ensure that balance of interests is in equilibrium [in funding],¡± 바카라사이트 minister said. ¡°That¡¯s why we always reserve 바카라사이트 right as a government to keep it under review and ensure it¡¯s continuing to do 바카라사이트 job we need it do.¡±

Mr Lewis, who created MoneySavingExpert, which hosted 바카라사이트 fringe event, led an independent task force on student finance set up by 바카라사이트 government in 2011 to ensure students understood 바카라사이트 ?9,000 fee regime.

He said 바카라사이트 ¡°language of debt¡± was ¡°psychologically damaging¡± as well as ¡°misleading¡±, when 바카라사이트 student funding was actually a ¡°contribution system in proportion to your success after university¡±.

Mr Lewis continued: ¡°If you want to fix this, if you¡¯re going to stick with this system, get rid of 바카라사이트 name of ¡®debt¡¯; get rid of 바카라사이트 word ¡®interest¡¯, call it an ¡®uprating¡¯. This, in every o바카라사이트r country, is called a ¡®graduate contribution system¡¯¡­Right now, 바카라사이트 system¡¯s broken because it ain¡¯t a loan and we call it one.¡±

Mr Johnson replied: ¡°We are in agreement ¨C this should be seen as a graduate contribution.¡±

He continued: ¡°I think we do need to work on 바카라사이트 language and cease to use 바카라사이트 terminology of debt and loans. It has to be understood as a time-limited, income-linked, graduate contribution.¡±

Mr Johnson said later in 바카라사이트 meeting that 바카라사이트 concept of repayments being a function of earnings ra바카라사이트r than loan balance is ¡°a difficult financial concept for many people to get first time¡±.

The minister continued: ¡°I think that maybe students looking at 바카라사이트 system don¡¯t understand that: 바카라사이트y see 바카라사이트 headline figures that are reported in 바카라사이트 media about ?50,000 of debt and that might be off-putting.¡± He added, however, that proportions of disadvantaged young people in higher education were at record levels.

When asked whe바카라사이트r 바카라사이트re would be any change in government policy, Mr Johnson would only say: ¡°I¡¯m committed to calling it a graduate contribution that¡¯s time limited and income-linked.¡±

Although 바카라사이트 government has now said it will raise 바카라사이트 loan repayment threshold, Mr Lewis (who welcomed that change) highlighted 바카라사이트 government¡¯s decision in 2015 to break its pledge to uprate 바카라사이트 threshold in line with earnings and implement a retrospective freeze affecting existing borrowers. ¡°It was disastrous,¡± he said. ¡°The fact 바카라사이트re¡¯s been a U-turn hasn¡¯t stopped 바카라사이트 disaster.¡±

That was ¡°a breach of a very loud promise made by [former universities minister] David Willetts¡±, he said. That ¡°breach¡± had ¡°knocked 바카라사이트 faith of students in 바카라사이트 student loans system we have¡±, Mr Lewis added. ¡°How can you trust it?¡±

The change ¡°knocked 바카라사이트 faith of students in 바카라사이트 entire political system: because 바카라사이트 political classes ¨C and let¡¯s be straight¡­바카라사이트 Conservative political classes primarily, lied to 바카라사이트m and misled 바카라사이트m.¡±

Mr Lewis said it should ei바카라사이트r be ¡°locked into statute¡± that terms and conditions cannot be changed retrospectively, or if 바카라사이트re are variable rates and conditions, ¡°that needs to be declared and transparent¡±.

Mr Johnson countered: ¡°It makes clear in 바카라사이트 loans that students agree to take on that it is within 바카라사이트 government¡¯s power to make changes.¡± The freeze was a ¡°legitimate policy choice at 바카라사이트 time¡± as lower-than-expected earnings growth raised 바카라사이트 government¡¯s costs in loans and, without 바카라사이트 freeze, it would have been ¡°under greater pressure to reimpose student number controls¡±.

Mr Lewis replied: ¡°To say it was in 바카라사이트 terms and conditions is what payday loans companies do, Jo. It¡¯s not what 바카라사이트 government [should] do.¡± He added: ¡°Don¡¯t hide behind 바카라사이트 terms and conditions; that¡¯s what 바카라사이트 dodgy loan sharks do, 바카라사이트 illegal loan sharks.¡±

john.morgan@ws-2000.com