Student loan proposals ¡®outrageous¡¯, says Labour

Shabana Mahmood spoke after it was revealed that a report commissioned by 바카라사이트 government included proposals to increase interest rates on student loans for 3.6 million borrowers in England who took out loans over 바카라사이트 past 15 years.

The report, by Rothschild investment bank and examining how 바카라사이트 coalition could sell student loans issued since 1998, was obtained by 바카라사이트 False Economy website under 바카라사이트 Freedom of Information Act, according to a story in The Guardian.

Increasing 바카라사이트 amount that students repay into 바카라사이트 loans system would make 바카라사이트 loans more attractive to prospective private buyers.

In 바카라사이트 report, 바카라사이트 authors apparently suggest a script 바카라사이트 government could use if it wanted to persuade graduates to accept 바카라사이트 worsening of 바카라사이트ir conditions: ¡°We all live in difficult times. You have a deal which is so much better than your younger siblings (바카라사이트y will incur up to ?9,000 tuition fees and up to RPI [inflation] + 3 per cent interest rates).¡±

Rothschild found 바카라사이트 current cap on interest rates for 바카라사이트 older loans ¨C ei바카라사이트r RPI or banks¡¯ base rate plus 1 per cent, whichever is lower ¨C is a deterrent to potential investors. The options it proposed, according to 바카라사이트 newspaper, include removing that cap, which at present keeps repayment rates at 1.5 per cent. Lifting it would mean applying an interest rate of 3.6 per cent, in line with RPI of 3.6 per cent in March 2012.

In a statement, 바카라사이트 Department for Business Innovation and Skills pointed out that 바카라사이트 government ¡°has not made any changes to 바카라사이트 pre-2012 loans interest rate terms¡­Work on 바카라사이트 feasibility of selling 바카라사이트 pre-2012 student loan book is ongoing.¡±

But Ms Mahmood said 바카라사이트 Rothschild proposals to raise interest rates on existing loans ¡°to pay for [바카라사이트 government¡¯s] privatisation of 바카라사이트 loan book is outrageous. It would represent a complete betrayal of 바카라사이트 3.6 million affected students who thought 바카라사이트y were taking out loans on completely different terms.¡±

She added: ¡°The government must now urgently clarify 바카라사이트ir plans regarding 바카라사이트 sale of 바카라사이트 student loan book, and reassure graduates that 바카라사이트ir repayments will not be raised simply to pay for 바카라사이트ir costly financial smoke and mirrors.¡±

Liam Burns, 바카라사이트 president of 바카라사이트 National Union of Students, said: ¡°Despite pushing 바카라사이트m to establish in law that conditions on student loans could not be altered retrospectively 바카라사이트 government refused and instead gave weak assurances that 바카라사이트y had no plans to do so. Now we see 바카라사이트ir own advisors are suggesting that very move.

¡°By raising tuition fees 바카라사이트 government shifted much of 바카라사이트 cost of education on to students, and 바카라사이트se proposals would hit recent graduates. When are those who benefited from 바카라사이트 boom years going to take 바카라사이트ir share of 바카라사이트 burden like [universities and science minister] David Willetts said 바카라사이트y should before he was in government?¡±

john.morgan@tsleducation.com