Autumn Statement: National Union of Students ‘disappointed’ Government has backtracked on 2012 student loan repayment threshold promise

The National Union of Students (NUS) has said the Government has shown “complete disdain for students” and is “disappointed” to learn the student loan repayment threshold will be frozen at £21,000 - despite a 2012 promise it would not do so.

Money expert Martin Lewis also said the Conservatives have “betrayed a generation of students” after it quietly put out a report on one of the busiest days in UK politics in which it backtracked on a promise it made to students in 2012 regarding their loans.

Almost immediately after it emerged, Mr Lewis said: “The fact the chancellor didn’t even have the balls to put it in his Autumn Statement speech shows that he knew how unpopular it would be.”

Today, though, the NUS said the changes were “buried” on page 93 of this week’s Spending Review which stated: “To reduce government debt, the student loan repayment threshold for Plan 2 borrowers will be frozen until April 2021. The discount rate applied to student loans will be revised to 0.7 per cent above RPI, to bring it into line with the Government’s long-term cost of borrowing. Taken together, this will reduce the Government’s estimate of the long-term student loans subsidy to around 30 per cent.”

Read the Government’s full outcome and response which was ‘quietly put out’:

The freezing of the repayment threshold came despite earlier promises to raise it in line with average earnings, and the NUS said the typical borrower is now estimated to repay an extra £2,800.

The student campaigner described how it has been calling on the Government to #StopTheHike of student loan repayments, which would unfairly force extra costs onto graduates, adding: “We believe it is unacceptable for the cost of education to be funded by plunging students into debt.”

A student on a three-year undergraduate course who takes out a full maintenance loan will now graduate with more than £53,000 of debt, plus interest. NUS’s Debt in the First Degree research showed how 43 per cent of £9000-a-year graduates believed their standard of living would be affected by the cost of repaying their student loan.

NUS vice president higher education, Sorana Vieru, said: “More than 80 per cent of respondents to the Government’s consultation on the freezing of the loan repayment threshold said it was a bad idea. Cut after cut, the Government has shown complete disdain for students and their futures.

“It has gone back on its word and betrayed students who have already taken out loans. Women and black and minority ethnic (BME) graduates will be disproportionately affected by these changes, which is another blow for the most disadvantaged students.”

Labour has since told The Independent that the Government is guilty of mis-selling and could be open to a legal challenge over the move because many students had decided to go to university on the back of the Government’s promise the £21,000 repayment threshold would be uprated by the time they had to start repaying their loan.