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Student loans on the agenda in parliament

Friday 08-07-2016 - 11:13

Before parliament goes on its summer recess in a fortnight, student loans have been a hot topic in the House of Commons and the House of Lords.

No less than three debates have been scheduled for MPs and peers to discuss student loans in the last three weeks.

MPs debated student loan repayments in the House of Commons last Monday. The debate was led by Valerie Vaz, Labour MP for Walsall South, who argued that the current system of student loan repayments is unfair and disproportionately affects lower earners and people from disadvantaged groups. Drawing on a briefing from NUS, Vaz raised concerns in the debate about the government’s decision last year to freeze the loan repayment threshold at £21,000 until 2021. Under the repayment scheme designed in 2012, the threshold had been due to increase in line with average earnings, but despite over 80 per cent of responses to a government consultation being against it, the freeze will leave graduates effectively paying back their loans on lower incomes.

Patrick Grady, SNP MP for Glasgow North, expressed concern selling off the student loan book to private companies, while others noted that 17 and 18 year-olds are unfairly expected to understand the complex contract terms of loans without financial advice, and that the loans are not subject to financial regulations and consumer protections so the terms can even change after they have been agreed.

Elsewhere, in the House of Lords, the Lords Economic Affairs Committee has recently held a session on the sustainability of the student loan system. The Committee took evidence from Dr Gavin Conlon, an economist from London Economics that NUS recently worked with on a financial analysis of nursing bursary changes. Nick Hillman, Director of the Higher Education Policy Institute (HEPI) also gave evidence, before officials from the Department for Business, Innovation and Skills and the Student Loans Company were questioned about the current student loan policy arrangements.

This all comes before the House of Commons will debate a petition on student loans changes that has now reached an incredible 130,000 signatures. This petition calls for the retrospective change to the repayment threshold of loans taken out since 2012 to be scrapped. The debate will be led by Helen Jones, Labour MP for Warrington North, on Monday 18 July – the last week that parliament is sitting before September.

NUS has been – and will continue to be – feeding students’ views and experiences into the parliamentary process at every point. We have produced a briefing for MPs (available here), which has already been extensively quoted during Valerie Vaz’s debate. Students’ unions can share this briefing with their MPs and ask them to attend the upcoming debate on 18 July. We will also be leading calls for amendments to the Higher Education and Research Bill – which is awaiting a date for its first debate in the House of Commons – to ensure that student loans terms cannot be changed retrospectively.

For any further details, contact Alexander in our Political Affairs team at: alexander.lee@nus.org.uk.

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