To all with student loans

Chutzpah

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Jan 9, 2009
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You may have heard about the current disgusting government position re. student loans. If not read on...

When student loans were brought in, the government pledged that the amount borrowed would always cost the same in 'real terms' when a student finally paid it off.

In order to achieve this, they linked the interest rate to the Retailers Price Index (RPI). There were some concerns over this (as this was affected by mortgages), which came to a head last year when ex-students paid nearly 5% interest on their rather sizeable loans.

Now that the economy has gone up the spout, we have all been told that the UK economy is deflating, as opposed to inflating. The RPI is currently -0.4%. Technically, rather than pay interest on your loan, the loan should reduce in cost.

Good news to those with student loans?

No. The government has actually decided to reduce the cost of the student loan interest to just 0%.

What this means is that those with student loans will actually pay MORE for their loan, the exact opposite of a Labour pledge.

I've got some reading material that explains all this much better than I could:

Student loan interest rate decision is a disgrace - This is Money Blog
Student Loans: Should you pay them off?...
Will deflation mean student loan pays me interest? | This is Money

And if you, like many others, are affected by this it is in your interests to sign the petition below. I will also be writing a letter to my MP in a minute.

http://petitions.number10.gov.uk/Loansofstudents/
 

Tony

What Consumer Founder
Apr 7, 2008
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Signature added, the confirmation e-mail from downing street went to my junk folder which amused me. I remember protesting against these when they were first proposed.... a few years ago now : )
 

Chutzpah

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Jan 9, 2009
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I've also fired off an email to my local Labour MP, but he's an ex-party whip and never goes against party line, so I don't hold much hope of getting a response that doesn't extend beyond "thanks for your email, I've noted your points... by the way, more people than ever attend university thanks to changes instigated since Labour came into power".

The National Union of Student president has supported the 0% rate, but 'funnily enough' he stood as a candidate for 'Labour students' for that election... expect to see him put up for a local election by Labour in the future then?