Tories vow to stop funding 'dead-end degrees' to cut student loan interest
Following Chancellor Rachel Reeves’ November budget, the salary threshold at which repayments kick in under the system will be frozen at £29,385 for three years.
The Conservatives have vowed to end "dead-end degrees" and cut the high student loan interest rates that are crippling graduates.
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Conservative shadow education secretary Laura Trott told LBC: "It's really clear we need a new deal for young people."
She told LBC's Iain Dale the Conservative Party is coming forward with a "big, controversial package" that not everybody will agree with.
Ms Trott explained: "We're stopping funding dead-end degrees that are not delivering for young people and are really expensive for the taxpayer.
"We're going to use the savings to help graduates who are paying their loans back with above-inflation interest, and we're also going to provide 100,000 more apprenticeships.”
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Ms Trott referenced unemployment rates, which have risen to a near five-year high with the jobless rate among young people at its worst level for more than a decade, according to official figures.
She also noted the difficulty many graduates are having finding a job, and the struggles of those who are in work to repay student loans.
Asked by Iain why her party, who were in power for 14 years, didn't fix the system before, Ms Trott suggested Rachel Reeves has since made the situation worse.
"It's because she's frozen the loan repayment thresholds," Ms Trott said.
Following the Chancellor’s November budget, the salary threshold at which repayments kick in under the Plan B system will be frozen at £29,385 for three years, leading to many having to pay more.
Interest on these loans is charged at the rate of Retail Prices Index (RPI) inflation plus up to 3%, depending on how much a graduate earns.
NUS president Amira Campbell said the Chancellor should look for solutions to a system in “dire need of overhaul”, such as capping interest.
“The current student loan system is freezing our future,” she said.
“How can graduates be trying to build our professional lives all while the Chancellor is acting like a loan shark, taking hundreds a month off our pay cheques while the interest grows even faster? Is this the reward we get for following their advice and investing in our future?”