Graduates face steeper bill to clear student debt

George Osborne promised last week that the government would leave behind for the next generation “a stronger country than the one we inherited”.

Yet that generation will inherit something else from the chancellor too: rocketing student debt that has to be repaid faster.

All students and graduates in England and Wales who have taken out loans since 2012, when the tuition fees cap rose to £9,000 a year, face higher monthly repayments. This is because of Osborne’s decision to freeze the £21,000 income repayment threshold for five years, rather than raising it in line with average earnings.

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Sir Peter Lampl of the Sutton Trust, which aims to improve social mobility through education, said: “Freezing the repayment threshold will add to graduates’ already heavy financial burden [and] adversely affect low earners and graduates from low-income homes.”

Read the full article here. (£)

The Sutton Trust was also quoted on BBC Radio 4 on this issue on Money Box Live.