The government is coming under increased pressure to change the student loans system. Some are calling for a complete reform – making student loans into a tax. They argue that that is what they effectively are already. Others are calling for a less serious reform – raising the salary cap at which the repayments of the loan are triggered. This is the level of salary a graduate has to earn before they have to start paying back their loan. As we’ve mentioned before, one of the reasons some people consider pension loans is to help their children pay off their student debt.
The Telegraph reports –
“Ministers are under pressure to lift the £21,000 threshold and link it to inflation or earnings after which payments are made to pay back student loans amid growing concern about graduate debt levels… One option being considered is to increase the threshold either by inflation or by linking it to average earnings. Another option is to cut the looming 6.1 per cent interest rate on student loans after a report found graduates were leaving university with debts of tens of thousands of pounds… The news came as Angela Rayner, Labour’s education spokesman, said the party’s plan to cancel all historic student debt would cost £100billion, adding that she needed “a big abacus”.