It is two years since students across the country gathered in protest (pictured above) against the Coalition’s decision to triple tuition fees to £9,000. Now, the government admits that half of graduates paying the higher fees will not have to fully repay their student loans.
Just over a week ago, Universities and Science Minister David Willetts stated that “we estimate that around half of all borrowers will have some part of their loan written off”. As it stands, graduates will only have to start paying the loan once they are earning £21,000 per annum. If the loan has not been fully paid within thirty years, it is written off. The implication of Willetts’ comment is therefore that half of students paying the higher fees will not be rich for long enough to have to pay back their debts in full.
During the parliamentary discussion, Charles Kennedy noted that in June the Institute of Fiscal Studies had estimated that only 37% of graduates would have debts written off. In response to this discrepancy, Willetts claimed “there is a separate calculation for the value of the loans that will be written off, which we estimate will be about 30%, so both figures are correct”.
A spokesperson from the Department for Business Innovation and Skills, specialising in Higher Education, attempted to clarify Willetts’ figures. She told The Cambridge Student that whereas 50% of students will have some of their debts written off, “30% is the overall amount of money we estimate we won’t get back”.
Annabel Ward, a first year student paying the higher fees, told TCS “It’s not surprising. We knew from the beginning that you only have to start paying after you earn £21,000 – it would be impossible for everyone to pay their debts back entirely”.
What does this mean for Cambridge graduates? In June the IFS claimed that under the new system, “virtually all of the poorest 30 per cent of graduates reach this point and have some debt written off”.
Research has shown that graduates from top universities initially earn significantly more than others: LSE studies have estimated that graduates from the top quarter of universities earn 10-16% more than those from the lower quarter. It seems that this revelation will not affect the majority of Cambridge students paying the higher fees.
Hazel Shearing – News Reporter
Photo – Jess Touschek