Martin Lewis urges David Cameron to ‘mitigate damage’ in open letter after Conservatives backtrack on 2012 student loan promise

Money expert Martin Lewis has written to Prime Minister David Cameron “to see if there is a way the damage can be mitigated” after the Conservatives made a U-turn on a 2012 student loan promise.

Mr Lewis, founder of MoneySavingExpert.com, urged Mr Cameron to rethink the Government’s decision to retrospectively change the terms of student loans and revealed how he also engaged lawyers shortly after it came to light the Tories’ reversed decision “was buried in the small print of the Autumn Statement.”

Describing the decision to backtrack as being “hugely damaging,” the former head of the Independent Taskforce on Student Finance Information writes: “It means many lower and middle-earning graduates will repay thousands more over the life of their loans.”

Highlighting how there was a consultation before the change - which Mr Lewis said he responded to - he continues: “Yet only five per cent of consultation responses were in favour of this change - 84 per cent were against it - so I am confused why, despite such cross-society opposition, your government pushed ahead with the retrospective change anyway?”

Read the letter in full:

First time undergraduates in England, who started university in September 2012 and beyond, were repaying loans at a rate of nine per cent of everything earned above £21,000 post-graduation. In 2010 - when it launched the new system - the Government promised how, from April 2017, this £21,000 threshold would rise annually with average earnings.

However, the Conservatives made the decision reverse it, freezing the threshold until at least 2022. So, instead of the threshold going up each year, it will now be stuck at £21,000. According to the Government’s own figures, this will leave more than two million graduates paying £306 more each year by 2020/21 if they earn over £21,000.

Now, with lawyers looking into whether this change can be challenged legally, Mr Lewis’ letter to Mr Cameron warns how “this is just as much a moral issue as a legal one” and urges the Prime Minister to take a personal interest in this decision and to look at reviewing it.

It also asks for a meeting to discuss the issue alongside some affected students, graduates, and their parents.

Reflecting on the change - and his reason for writing the letter - Mr Lewis said: “This disgraceful move goes against all the principles of good governance.”