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11/10/2010
Student Loans Move In Best Interest
The Government could soon ask graduates in England to pay a rate of interest on their student loans.
The move may see the earnings threshold at which graduates have to start repaying the money raised.
Currently, the loans are charged at what amounts to a zero rate, with the threshold for pay back standing at £15,000.
Ministers are now moving towards charging most graduates a flat, real rate of interest on their loans, with only graduates on low salaries enjoying a zero rate of interest.
The decision comes ahead of a higher education funding review likely to recommend removing the tuition fee cap.
The review, published by Former BP Chief Lord Browne, is due on Tuesday.
Due to Liberal Democrat MPs in the coalition having signed a pledge to oppose a rise in fees, Ministers on both sides have not yet reached a deal that will be progressive enough to secure backing.
A system of tiered interest rates, tied to graduates' earnings is being considered, meaning higher rates for higher-earning graduates.
There is an understanding, from all sides in government, that tuition fees will rise and graduates will have to pay a lot more for their degrees.
Despite weeks of debating proposals, an agreement is yet to be reached between the two sides.
A government spokesman said: "Our aim is to help the least well off, not to clobber the better off."
(BMcN/KMcA)
The move may see the earnings threshold at which graduates have to start repaying the money raised.
Currently, the loans are charged at what amounts to a zero rate, with the threshold for pay back standing at £15,000.
Ministers are now moving towards charging most graduates a flat, real rate of interest on their loans, with only graduates on low salaries enjoying a zero rate of interest.
The decision comes ahead of a higher education funding review likely to recommend removing the tuition fee cap.
The review, published by Former BP Chief Lord Browne, is due on Tuesday.
Due to Liberal Democrat MPs in the coalition having signed a pledge to oppose a rise in fees, Ministers on both sides have not yet reached a deal that will be progressive enough to secure backing.
A system of tiered interest rates, tied to graduates' earnings is being considered, meaning higher rates for higher-earning graduates.
There is an understanding, from all sides in government, that tuition fees will rise and graduates will have to pay a lot more for their degrees.
Despite weeks of debating proposals, an agreement is yet to be reached between the two sides.
A government spokesman said: "Our aim is to help the least well off, not to clobber the better off."
(BMcN/KMcA)
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