The Government’s economic plan is in tatters, growth is sluggish and long-term unemployment amongst graduates in Plymouth remains stubbornly high. Failure to get the economy growing again means the Government is borrowing £245bn more than planned. That means each and every one of us will be paying more for the price of Tory failure. Knock on any door in Plymouth and you’ll get a story about how cuts and service reductions are having real impacts in our communities.
Having cut doctors, nurses, police officers, business investment budgets, council budgets and the defence budget, the Tories and their Lib Dem chums are now coming after graduates planning hikes in interest charged on their student loans.
Thousands of people in Plymouth have taken out student loans to study locally in Plymouth or further afield. Ministers plan to rip up 3.6 million existing loan agreements, which means instead of paying the rate of interest agreed when the loan was taken out thousands of people in Plymouth will be paying higher, near commercial rates. Why are they doing this?
Simply put with their economic plan failing to produce the optimistic results expected by the Chancellor they’re now looking at hiking fees, cutting budgets across the board. The student loan book, the collection of loans from graduates, is one such target. Loans are currently charged at a low interest rate – near to inflation – to ensure that students aren’t put off from going to university by high interest payments on their debts.
If the interest rate on the loans was more akin to the commercial loan rates you might get from a bank or building society, then the overall value of the student loan book would be greater and more attractive to be sold to the highest bidder.
Privatising your student loan could make the city banker who buys them from the state an awful lot of money if interest rates were higher. It may reduce the cost to the taxpayer but it will mean more pain and misery for thousands of graduates in Plymouth who will see their loan repayments rocket at the same time as wages are frozen and the cost of living is soaring.
Many people in Plymouth took loans out in good faith, many already worried about the level of debt this would see them graduate with. Britain needs more people going to University and Colleges to study higher level skills. Plymouth has seen huge strides made to encouraging more people from lower income backgrounds going to university often despite, not because of, government policy. Any policy that makes it harder and more costly for students from Plymouth to go to university, whatever their background, needs to be opposed.
The tripling of student tuition fees, the cutting of research funding and now the possible escalation of student loan interest should tell us all we need to know about the value this Tory-led Government attaches to higher education. Education must be open to all and not just those who can afford to pay. Low interest graduate loans that see people pay back only when they’re earning a decent wage after graduation is part of that deal and it’s a deal now under attack.
There are students from Plymouth at University now who are worried what these higher charges will mean for them. There are many more graduates who have made decisions about their finances, buying a home, getting a car, investing in a business, based on knowing what their loan repayments are. They now faced renewed uncertainty and potentially much higher costs.
I took out a student loan to be able to afford to go to university in Exeter and like millions of other people across the UK I did so with an understanding about what the future repayment amount would be. The uncertainty that this latest Government initiative creates is not only damaging to people at university, those who have graduated but another poisonous disincentive to those, especially from poorer backgrounds, who are considering whether to go to university in the first place.
The last time I spoke to Plymouth’s Tory MP, Oliver Colvile, about student loans he proposed giving a reduction on the total loan amount for rich students able to repay their loan quicker. I’m glad he dropped that out of touch idea, but he should not replace it with support for a policy that would see thousands of his constituents pay more. I know Labour’s Alison Seabeck will be standing up for students from Plymouth against this policy but will Mr Colvile back Plymouth students and graduates or yet again tow the Government line that sees Plymouth’s interest put second to propping up a failing economic plan by a failed Chancellor?
Luke Pollard lives in Plymouth and works in tourism. He is standing to be Labour’s candidate in Plymouth Sutton and Devonport. Find out more about his campaign here.