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Lorely Burt MPWorking hard for Solihull |
GOVERNMENT STILL OVERCHARGING LOCAL GRADUATES - BURT
September 7, 2009 4:45 PM
As university students from Solihull get ready to return to their studies, the town's MP, Lorely Burt has cautiously welcomed the news that graduates repaying their student loans will pay no interest from this month - but thinks that more could still be done to help indebted local graduates.
The announcement from the Treasury came only weeks after Liberal Democrats pushed the government to lower the interest rates on student loans.
Those graduates who took their loans out from 1998-onwards will, from September, pay 0% interest during the next academic year, whilst those who took out a loan pre-1998 will see their loan balance reduce even before they've made any payments as they'll pay a minus 0.4% rate.
Commenting today, Lorely said:
"Whilst the Government has taken a step in the right direction, all graduates, not just those who took loans out before 1998, should be paying the negative interest rate.
"The Government is still breaking a binding principle of student loans: Loans have always been set at the rate of inflation so there is no 'real cost' to them.
"Even with this new announcement, the Government is still effectively overcharging millions of students. While a 0% loan sound cheap, it means former students' purchasing power is being eroded, as with deflation, loans should be shrinking.
"Currently, students with loans of £10,000 will only be £40 a year out of pocket, but the worry is what happens if inflation goes to minus 5%.
"This change doesn't come into effect for a few months, so there is still time for the Government to do the right thing and to really give graduates a break."
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