Summary
The Conservative party in the UK has promised to lower the interest on certain student loans that were taken out between 2012 and 2023. The plan involves reducing the interest rate to match the Retail Prices Index (RPI) without any extra percentage, hoping to make it easier for graduates to pay off their loans. There is ongoing debate about the fairness of the current student loan system, with various political figures expressing differing views.
Key Facts
- The Conservative leader Kemi Badenoch pledged to reduce interest on Plan 2 student loans taken between 2012 and 2023.
- The proposed interest rate would be capped at the Retail Prices Index (RPI), currently 3.8%.
- Plan 2 loans were introduced in 2012 and phased out in 2023, but still apply in Wales.
- Repayments for loans start when graduates earn above £28,470.
- The repayment amount is 9% of what is earned above this threshold.
- Critics, including some Labour MPs, call the current loan system unfair.
- The repayment threshold will be frozen at £29,385 from April 2027 for three years.
- Other political parties and figures have voiced differing views on the loan system's fairness.
