‘A tax on ambition’: graduates tell all to student loans inquiry
Summary
Thousands of graduates shared their negative experiences with student loans in a UK parliamentary inquiry. Many people feel the interest rates and repayment rules are unfair, especially after the government froze the repayment threshold, meaning more graduates have to pay back loans sooner and in larger amounts.Key Facts
- Over 52,000 people responded to a UK Parliament inquiry on student loans.
- The inquiry focuses on "plan 2" loans, used by many students in England and Wales.
- The government froze the income level (£29,385) at which graduates must start repaying loans until 2030.
- Graduates pay 9% of their earnings above this threshold toward loan repayment.
- Many graduates report their loan balances grow because interest adds up faster than they can pay.
- 92% of respondents said the interest rates and repayment terms were unfair.
- Official materials originally said the repayment threshold would rise with average earnings, but it has been kept flat.
- The government announced a cap on loan interest rates at 6% starting September to help limit costs.
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