Andrea Leadsom hints at student loan interest rate U-turn
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It has been hinted by the Leader of the House of Commons, Andrea Leadsom, that there could well be a U-turn on student loan interest rates following severe criticism. It is thought that the Department of Education is reconsidering plans to increase interest rates on loans to 6.1%. While current students will not pay this rate of interest, it will be added to loans on both tuition and maintenance loans for millions of students who have already graduated. Following concerns from several MPs, she responded: “I think the mood of many colleagues has been heard and I'm quite sure that the Department of Education is considering this.” This would not be the first U-turn since the general election. Theresa May has already gone back on social care, school meals, the energy cap, foxhunting and winter fuel payment policies. The U-turn could be seen as a boost to Jeremy Corbyn’s campaign to abolish tuition fees altogether. The universities minister, Jo Johnson, has argued that the loan system currently in place is “sustainable” and that cutting fees altogether would be “mind-bogglingly expensive”. However, Conservative MP Richard Graham cautioned that “things have changed” since 2012's hike in tuition fees, citing the recent IFS study into fees that will leave the poorest students with £57,000 in debt. While students who earn over £41,000 post-graduation will pay interest rates of 6.1%, those with salaries between £21,000 and £41,000 will instead pay interest on a sliding scale between 3.1 and 6.1%.