In October, the Prime Minister called for an inquiry into the student loan system for higher education (HE). In this briefing note, we focus on two of the more unpopular features of the current system. We explore government options for reducing the interest rates charged on student loans, from the current levels of RPI + 3% while studying and RPI + 0–3% (depending on income) after leaving university, and for reintroducing living-cost grants – which do not have to be repaid – for students from lower-income families. This briefing note will be submitted as evidence for the inquiry.
On Sunday, the Prime Minister Theresa May announced that the income threshold above which graduates start making repayments on their student loans would be increased from £21,000 to £25,000 for all those who started university after 2012, and that the cap on tuition fees at English universities would be frozen at its current level of £9,250. This briefing note examimnes the impact on graduates, public finances and universities.
The Department for Business, Innovation and Skills launched a public consultation regarding the proposal on 22 July 2015. This short note was submitted to the consultation and extends the work of Briefing Note 174 (Britton, Crawford and Dearden, 2015), analysing the likely implications of the proposed changes for students entering university in 2016-17.
