Thank you for contacting me about plan 2 student loans.
Freezing the threshold for repayment will mean that as graduates' starting salaries increase with inflation, they will end up paying more and earlier.
Those on plan 2 loans who earn more than £50,270 per year will pay a higher interest rate of 6 per cent RPI. This means they will have to earn up to £65,000 before they start paying off the actual loan, rather than simply the interest accumulating on it. This interest rate freeze, in an environment where rates are falling, is unjustifiable.
Youth unemployment is out of control, debt-trap degrees are leaving graduates with no prospect, and now the Government has decided to launch a £7.4bn tax raid on them by freezing student loan thresholds. Graduates deserve better.
Thank you again for taking the time to contact me.
