Graduates Share Disturbing Experiences in Student Loans Inquiry
‘A tax on ambition’: graduates tell all to student loans inquiry
Image: Theguardian
Over 52,000 graduates have voiced their frustrations in an inquiry regarding student loans, highlighting issues with high interest rates and repayment terms. Many reported feeling misled about the affordability of repayments, which they describe as a 'tax on ambition.' The inquiry follows a controversial decision to freeze the repayment threshold until 2030.
- 0192% of respondents believe the interest rates and repayment terms of their student loans are unreasonable.
- 02The repayment threshold for plan 2 loans will remain frozen at £29,385 until 2030, sparking accusations of mis-selling.
- 0357% of graduates did not fully understand the terms and conditions of their loans prior to borrowing.
- 04Some graduates are now paying back hundreds of pounds monthly, contrary to earlier assurances that repayments would be manageable.
- 05The government has capped the plan 2 loan interest rate at 6% starting September 2023.
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An official inquiry into student loans has revealed significant discontent among graduates, with over 52,000 individuals sharing their negative experiences. The chair of the Commons Treasury select committee, Dame Meg Hillier, noted the overwhelming frustration expressed by respondents. Many graduates criticized the high interest rates and repayment terms, with 92% deeming them unreasonable. The inquiry was prompted by the government's decision to freeze the repayment threshold for plan 2 loans at £29,385 until 2030, which has led to accusations of mis-selling, as earlier promises indicated this threshold would rise with earnings. Graduates reported feeling misled about the affordability of repayments, with some describing it as a 'tax on ambition.' The government has responded by capping the interest rate at 6% starting in September 2023 and reintroducing targeted maintenance grants. However, many graduates remain concerned about the financial burden of their loans.
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The freezing of the repayment threshold significantly affects graduates' financial situations, leading to higher monthly repayments.
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