‘A tax on ambition’: graduates tell all to student loans inquiry

Thousands of graduates have told an official inquiry their horror stories and bad experiences relating to student loans, underlining what the chair of an MPs’ committee called massive levels of “frustration and upset”. Amid an ongoing row over the ballooning cost of degree course debts , more than 52,000 people responded to a call for evidence by the Commons Treasury select committee as part of its inquiry into student loans and the taxation of graduates. In recent months, pressure has been building on the government to reform the student loans system, with some politicians and campaigners claiming that the interest rates and loan terms are punitive and unfair. The debate has focused on the millions of students from England and Wales who have taken out a “plan 2” loan. Many have money taken from their wages each month to repay their debt, but what they pay off is often dwarfed by the interest that is being added every month, so the sums they owe get bigger. The catalyst for the latest row was the chancellor’s decision to freeze the salary threshold for plan 2 loan repayments for three years. This threshold, above which graduates have to repay 9% of anything they earn, will now stay frozen at £29,385 until 2030. MPs invited people to contribute their experiences and views on student debt. Some claimed the interest rates were “extortionate” and “higher than my mortgage”, while others said they had been assured repayment thresholds would rise with inflation. …