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Student Loan Repayment Changes Show Government’s Disregard for Low-Income Students Impact’s Hannah Lowe makes the case that lowering the student loan repayment threshold spells educational and economic disaster for those without the cash to weather the change. Government ministers are currently debating lowering the student loan repayment threshold from £27,000 to £23,000, meaning that students will now likely have to repay more of their student loan sooner after graduation. This is a government attempt to save Treasury money being spent on the student finance system. However, it is difficult to fathom how this can be deemed as an appropriate way to go about doing so as the plans will clearly hit students from lower income backgrounds the hardest. The potential threshold change is extremely disheartening, especially following over a year of online teaching at ‘Zoom University’ that left many, including myself, feeling as though they didn’t get their money’s worth. Additionally, as we all know, most universities refused to lower tuition fees, making the student loan change even more of a spit in the face. Now, with the average graduate salary estimated to be between £21,000-£26,000, most employed graduates will have to immediately start repaying their student loan upon landing their first job. If saving up and getting on the property ladder wasn’t hard enough, this change will make it near impossible. Hypothetically, a student with the highest maintenance loan and a salary of £24,000/year will have to pay £90 more annually, equating to about 17.1% of their earnings being taxed. Add to this the fact that, even at this rate, they are unlikely to ever pay off their entire loan. This is immensely unfair and demonstrates how the education system is designed only for students from high-income backgrounds. Soon, it seems, with elitism rife in government, higher education will become financially inaccessible for those from lower-income backgrounds.
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Such a policy also sheds light on the failed policies that have marketised universities. As Jo Grad, General Secretary of the University and College Union, said: “Loading more debt onto students is not the way to deal with the failed marketisation of higher education.” Adding, “it is a regressive move that will hit lower earners hardest.” Revealingly, The Independent reported that the proportion of lower-income pupils entering university has stagnated – with just a 0.1% rise in the past year – while the proportion of higher-income pupils has risen by 1%. This demonstrates that the education system is already proving unsuccessful in minimising the access gap between lower and higher-income students. The General Secretary of the Association of School and College Leaders said it was “worrying” to see that the university access gap has widened, making the decision to reduce the threshold utterly baffling. This potential legislation will discourage many prospective workingclass students from coming to university as they recognise they are disproportionately affected by these changes. This increased gap between lower-income and higher-income students may also create a more extreme North-South economic divide. Analysis by the Office for Students (OfS) shows that the communities with the lowest level of access to higher education are those from industrial towns and cities of the North of England and the Midlands. The report states that 55% of young people in London go into higher education but only 40% in the North-East. This then raises concerns that the threshold lowering is pushing lower-income people away from attending university, meaning the North-South divide may grow even greater. Clearly, this policy makes for seriously damaging consequences for many students across the country. It’s time for the government to take heed and change course.
By Hannah Lowe Illustration by Monica Mancini Page Design by Chiara Crompton
