Ex universities minister says student loan payments should be tripled

David Willetts, the former universities minister has said the government should treble the amount of student loan repayments graduates make annually.

In a paper released by the Higher Education Policy Institute today, he recommends that the starting threshold for repayment is lowered to earnings of £21,000, from the current rate of 27,295. The plans would see the amount graduates repay annually be tripled.

If the proposed lower threshold were introduced, 44% of loans compared to the current 53% would be written off by the government after 30 years.

“It is in the interests of students that universities are well funded. But that should not come at the expense of taxpayers,” Willetts said.

It has been reported that ministers are considering lowering the earnings threshold for repayments and cutting tuition fees in the upcoming October budget.

Jo Grady, the general secretary of the University and College Union, said in response to the proposals: “Lord Willetts, as the architect of £9k tuition fees, cannot claim to be concerned about the high levels of student debt while simultaneously proposing to hit lower-earning graduates with debt repayments.

“Lowering the repayment threshold to £21k, which is well below the average wage, will be a millstone around the neck of young graduates and risks putting students off from getting the education they need. It also fails to address the systemic problems with the university funding model which has led to rampant job insecurity and a precipitous decline in part-time and mature study.”

Responding to the paper, a Department for Education spokesperson said: “The student loan system is designed to ensure all those with the talent and desire to attend higher education are able to do so, whilst ensuring that the cost of higher education is fairly distributed between graduates and the taxpayer.” adding: “We do not comment on speculation in the run-up to fiscal events.”