Good for future students, not great for those of us who went through the last 5 years with them doubling already.
Capped at 6%.. still a wildly high interest rate compared to other forms of long term loan and only a 0.2% saving compared to the current 6.2%. Also, from September
> Interest rates on plan 2 and 3 student loans will be capped at 6% from September, the government has announced.
> Interest on plan 2 loans is currently paid at a rate of between RPI and RPI plus 3%, depending on earnings. At the moment, this means the rate varies between 3.2% and 6.2%.
So a .2% cap based off of current rates. Lol.
I suppose if the global economy goes to shit it will be more beneficial but this really does feel like the smallest possible bone they could have thrown at the problem.
Student loans should be capped to the BoE base rate! Anything else is profiteering
For the majority of students stuff like that is genuinely meaningless.
It’s redundant if the student isn’t earning enough to beat 6% interest, which the majority are not.
And because it seems to be open to manipulation whenever a government fancies it, it would be foolish to overpay on it. There’s nothing stopping a cap being reversed.
Periodic reminder that interest rates on student loans only affect the highest earners who could feasibly expect to pay off their loan early. The loan system *isn’t actually structured for this to happen*, it expects the majority of people to pay for the entire repayment period.
What does matter to **everyone** with a plan 2 student loan, high earners included, is the repayment threshold, which has been frozen (contrary to our original agreements) such that in a few years’ time it will coincide with minimum wage, and we’ll be paying 9% of everything we earn above minimum wage.
*That’s* what we need to apply pressure over.
If you have 50k of debt (many have a lot more) at 6% you would need to earn at least 62k a year just to pay the interest. The UK average salary is 37k.
This is performative bullshit. The vast majority will never pay them off. The only thing that matters is what percentage of your salary do you lose and how many years you lose it. And neither of them are changing. This, as many have said repeatably, is just a graduate tax.
I don’t think this is their solution. They cap loans during times where interest rates on loans are wildly in excess of the base rate. Hence why 6% is still terrible – its not their response its just what they would be doing anyway if this hadn’t blown up.
It should just mirror base +1% and, in time, be replaced entirely by a graduate tax. Because the rich don’t need the loans.
We need to turn this into the goto voting issue for anyone being fucked over by these loans. I will genuinely vote for any party who take this seriously and propose a fair alternative to this lifelong debt they’re locking hundreds of thousands of graduates into.
If the boomers can kick off around triple lock and winter fuel allowance everyone who has a student loan needs to do the same. Keep hammering the point until politicians take it seriously.
The system of extraction is unbearable. Let’s try to make it just bearable again. Good job we have a “Labour” government.
This needs to be done retrospectively, or else its too late for those of us who graduated 2016-2020 who suffered the bonkers covid interest rates already
Great, the government has done a sum total of fuck all
This is absolute bull shit! Capping at 6% won’t make a blind bit of difference to the loan repayments or size of people current balance.
It’s a bit of a slap in the face for the younger generation yet again… no meaningful change!
What an insanely pointless and useless attempt to get people to shut up.
1. The interest is so high it’s irrelevant, it’s purposefully designed that even high-earners (just not extremely high-earners) will never pay it off.
2. The max is currently 6.2% and it’s being capped at 6%. Wow.
For the vast majority of people, this will literally make exactly 0 difference to what they pay throughout their life.
Just pathetic.
A rare piece of good news for the above median earner.
Given how few people are going to pay these off the major issue is the freezing of the thresholds not the interest rates. Typical tinkering we’ve come to expect from this government
The trick is to be a teacher’ cause then they’ll never pay you enough to warrant paying it back anyway
Lmao its actually funny how the government takes every factor into consideration, never harsh to any specific group until it comes to students and young people lol then anything goes
The system is designed knowing most won’t pay it back and so some profit has to be made from the ones that will.
The tax payer won’t fund a course that isn’t immediately beneficial to them (you might find a case for nurses or similar to get support) it won’t fund people to do either a a course that will help them earn more than the average taxpayer (because why should the poor pay for others to be rich) and it won’t fund courses that don’t lead to high paying jobs, because they don’t see the point.
The current system, as shit as it is still costs the taxpayer 11bn a year. That’s roadsweepers and shelf-stackers (nothing wrong with those jobs) paying dentists and doctors to study.
This is worse than doing nothing, not because its a bad policy. It brings the topic back into conversation and makes the government look out of touch as the fix is not effective. People want thresholds changed or a interest rate set at BoE
There should be no interest on student loans. At the rate they’re paid back, this is more of a predatory tax than an interest cap.
THIS. MAKES. ZERO. DIFFERENCE.
It will still grow faster than most can pay off.
Therefore it won’t be paid off.
Therefore it is not a loan, it is a tax on graduates.
If it is ok to have a specific tax for people who have used a specific service, then I trust we’ll also be adding a “used the NHS tax”, or a “used the fire service tax”, or a “went to prison once” tax…
What a joke. Protecting lenders over the students as per usual. This is a token gesture at best!
24 comments
Good for future students, not great for those of us who went through the last 5 years with them doubling already.
Capped at 6%.. still a wildly high interest rate compared to other forms of long term loan and only a 0.2% saving compared to the current 6.2%. Also, from September
> Interest rates on plan 2 and 3 student loans will be capped at 6% from September, the government has announced.
> Interest on plan 2 loans is currently paid at a rate of between RPI and RPI plus 3%, depending on earnings. At the moment, this means the rate varies between 3.2% and 6.2%.
So a .2% cap based off of current rates. Lol.
I suppose if the global economy goes to shit it will be more beneficial but this really does feel like the smallest possible bone they could have thrown at the problem.
Student loans should be capped to the BoE base rate! Anything else is profiteering
For the majority of students stuff like that is genuinely meaningless.
It’s redundant if the student isn’t earning enough to beat 6% interest, which the majority are not.
And because it seems to be open to manipulation whenever a government fancies it, it would be foolish to overpay on it. There’s nothing stopping a cap being reversed.
Periodic reminder that interest rates on student loans only affect the highest earners who could feasibly expect to pay off their loan early. The loan system *isn’t actually structured for this to happen*, it expects the majority of people to pay for the entire repayment period.
What does matter to **everyone** with a plan 2 student loan, high earners included, is the repayment threshold, which has been frozen (contrary to our original agreements) such that in a few years’ time it will coincide with minimum wage, and we’ll be paying 9% of everything we earn above minimum wage.
*That’s* what we need to apply pressure over.
If you have 50k of debt (many have a lot more) at 6% you would need to earn at least 62k a year just to pay the interest. The UK average salary is 37k.
This is performative bullshit. The vast majority will never pay them off. The only thing that matters is what percentage of your salary do you lose and how many years you lose it. And neither of them are changing. This, as many have said repeatably, is just a graduate tax.
I don’t think this is their solution. They cap loans during times where interest rates on loans are wildly in excess of the base rate. Hence why 6% is still terrible – its not their response its just what they would be doing anyway if this hadn’t blown up.
It should just mirror base +1% and, in time, be replaced entirely by a graduate tax. Because the rich don’t need the loans.
We need to turn this into the goto voting issue for anyone being fucked over by these loans. I will genuinely vote for any party who take this seriously and propose a fair alternative to this lifelong debt they’re locking hundreds of thousands of graduates into.
If the boomers can kick off around triple lock and winter fuel allowance everyone who has a student loan needs to do the same. Keep hammering the point until politicians take it seriously.
The system of extraction is unbearable. Let’s try to make it just bearable again. Good job we have a “Labour” government.
This needs to be done retrospectively, or else its too late for those of us who graduated 2016-2020 who suffered the bonkers covid interest rates already
Great, the government has done a sum total of fuck all
This is absolute bull shit! Capping at 6% won’t make a blind bit of difference to the loan repayments or size of people current balance.
It’s a bit of a slap in the face for the younger generation yet again… no meaningful change!
What an insanely pointless and useless attempt to get people to shut up.
1. The interest is so high it’s irrelevant, it’s purposefully designed that even high-earners (just not extremely high-earners) will never pay it off.
2. The max is currently 6.2% and it’s being capped at 6%. Wow.
For the vast majority of people, this will literally make exactly 0 difference to what they pay throughout their life.
Just pathetic.
A rare piece of good news for the above median earner.
Given how few people are going to pay these off the major issue is the freezing of the thresholds not the interest rates. Typical tinkering we’ve come to expect from this government
The trick is to be a teacher’ cause then they’ll never pay you enough to warrant paying it back anyway
Lmao its actually funny how the government takes every factor into consideration, never harsh to any specific group until it comes to students and young people lol then anything goes
The system is designed knowing most won’t pay it back and so some profit has to be made from the ones that will.
The tax payer won’t fund a course that isn’t immediately beneficial to them (you might find a case for nurses or similar to get support) it won’t fund people to do either a a course that will help them earn more than the average taxpayer (because why should the poor pay for others to be rich) and it won’t fund courses that don’t lead to high paying jobs, because they don’t see the point.
The current system, as shit as it is still costs the taxpayer 11bn a year. That’s roadsweepers and shelf-stackers (nothing wrong with those jobs) paying dentists and doctors to study.
This is worse than doing nothing, not because its a bad policy. It brings the topic back into conversation and makes the government look out of touch as the fix is not effective. People want thresholds changed or a interest rate set at BoE
There should be no interest on student loans. At the rate they’re paid back, this is more of a predatory tax than an interest cap.
THIS. MAKES. ZERO. DIFFERENCE.
It will still grow faster than most can pay off.
Therefore it won’t be paid off.
Therefore it is not a loan, it is a tax on graduates.
If it is ok to have a specific tax for people who have used a specific service, then I trust we’ll also be adding a “used the NHS tax”, or a “used the fire service tax”, or a “went to prison once” tax…
What a joke. Protecting lenders over the students as per usual. This is a token gesture at best!