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HEPI's student loan proposals are regressive and would hit the least affluent

10 June 2021

Responding to HEPI's modelling on proposed student loan repayment changes, UCU general secretary Jo Grady said:

'Offering students a choice between paying their loans back for longer or reducing the salary threshold at which they begin repaying them is no choice at all. Both maintain the stranglehold of student debt and lowering the threshold to £20,000 is particularly regressive, hitting the least affluent hardest. Ministers, and those in think tanks, would do well to remember that even lower earning graduates already spend most of their 30s and 40s paying effective tax rates of over 40%*. A threshold reduction to well below the average workers' salary would make that a reality for many graduates fresh out of university too, making it harder for them to plan and save for the future.

'Education is central to the post-Covid recovery, and instead of tinkering around the edges of a costly broken funding system we need bold solutions, like ending the tuition fees system altogether and replacing it with a publicly funded model for higher education. And businesses, who benefit so much from the graduate skills base, should be made to pay their fair share too, especially those who have cashed in during the pandemic.'

*See UCU's report 'The impact of student loan repayments on graduate taxes'

Last updated: 10 June 2021