Student loans system risks trapping Britain into 'intergenerational unfairness', MP tells LBC
Dame Meg Hillier says Labour must avoid creating a "crisis for the future" by burdening Brits in the 20s and 30s with piles of debt
Britain risks creating more "intergenerational unfairness" between young and old if it doesn't get fixing the student loan system right, a top MP has told LBC.
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Dame Meg Hillier says Labour must avoid creating a "crisis for the future" by burdening Brits in the 20s and 30s with piles of debt.
She warned that generation may risk becoming poorer in old age, despite pensioner poverty declining in recent years.
It comes as the Treasury committee published initial results from their survey about student loans, which saw more than 50,000 people respond.
The survey, which will inform the committees ongoing parliamentary inquiry into student loans, revealed half of those respondents saying they wouldn't take out such a loan again if they could take the decision now.
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LBC has spoken with campaigners who say the system is broken, and sailing generations with huge amounts of debt many may never pay off.
Dame Meg said it was "naive" for ministers to think that youngsters would be able to navigate the loans system and repayments when they were being told to go to university at 18.
And she said that a lack of pension savings, a crisis in housing, and student loans, means they risk creating a crisis for the younger generation.
She told us: "I think there needs to be some serious national discussion about how we're paying for people to have further education. If you've got teachers who will never pay it off, for example, and we've got a huge shortage of, say, physics teachers for a start, and they're never going to pay it off.
" Their money will just chip away at interest, but the balance will be going up all the time now. They may never pay it. The bean counters who designed it may say, well, that's fine, they'll never pay it off.
"But we know it's a huge psychological pressure on people and it's impacting their day to day lives, their long term future. So I think we need to have a national conversation about how we're going to fund student studies."
The government has frozen interest on plan 2 loans, and has said they will look at the wider system to see if improvements can be made.
More than 52,000 people responded to survey by the Treasury Committee, chaired by Dame Hillier, for an inquiry on the taxation of graduates following outrage over the rising costs of Plan 2.
Dame Meg told LBC: "For me, it is. I mean, intergenerational fairness is just something that we've got to get right. "Because if you're loading too much on the 20 to 30 generation. So that's everything from student loans, the challenges of housing, the fact that many of them can't afford their pensions.
"This is creating a crisis for the future. If we don't get it right, it's bad for them. "We've got people not fulfilling their full potential in jobs because partly because of these financial pressures, if we don't invest in this generation, there's going to be a real crisis, not just for them, but for the country as a whole.
"They're the engine room of Britain and we need to be at them and supporting them as much as we can."