BUSINESS OF THE HOUSE (29 JUNE)

The hon. Member raises the system in Northern Ireland, where loans begin repayment at £17,335 a year with an interest rate of 1.5%. He suggests this could be considered fairer and asks if the Minister should look into it.

The hon. Member thanks Jim Shannon for his intervention, agreeing that the Northern Ireland system seems fairer. She questions why the government would make student funding less progressive by freezing repayment thresholds, disproportionately affecting women, disabled graduates, BAME graduates, and those on lower incomes.

The hon. Member congratulates Valerie Vaz for securing the debate and expresses concern over the continual selling-off of student loans to private companies. He shares his experience under the old system where repayment is based on median wage, but highlights how this can lead to fluctuating payments.

The hon. Member discusses concerns about students being asked to sign contracts without clear terms or financial advice, suggesting that these young people are not equipped to understand the complexities of their loans. She also questions why student loans are exempt from consumer credit protection.

The Government have increased funding for higher education from £22 billion in 2009-10 to £28 billion in 2014-15, forecasting an increase to £31 billion by 2017-18. The student loans system is fair and sustainable, removing financial barriers and supported by the taxpayer with outstanding debt written off after 30 years. Participation rates for disadvantaged students have increased from 13.6% in 2009 to 18.5% in 2015, a 36% increase compared to under Labour. In Walsall South, participation has risen from 25.1% in 2010 to 31.4% in 2015.

Asked whether the Minister had looked at how the student loan system works in Northern Ireland and if it provides a better response to students when it comes to repayment compared to mainland England.

Responded that higher education has been devolved in Scotland, Wales, and Northern Ireland since 1999, 2007 respectively. The current system in England is fairer on lower earners with a £21,000 threshold, higher than what was inherited from Labour. Interest rates after graduation increase based on income so that higher earners repay more.

Expressed dissatisfaction with the Minister's response, pointing out a breakdown of evidence showing those who receive £40,000 pay less under the new system. Questioned if it is fair to burden students with such large debts when they start their lives.

Defended the decision to freeze the repayment threshold, arguing that graduates who earn significantly more than non-graduates should contribute towards the cost of running a successful higher education system. This ensures fairness between those who have and have not benefited from university.

Argued that burdening students with debts as high as £45,000 is unfair when they start their lives. Mentioned the significant benefits graduates receive in terms of lifetime earnings.

Stressed that the current system allows more people to attend university now compared to when Valerie Vaz attended, highlighting the fairness in expecting higher earners to contribute towards education costs. The OECD praises England's student loan system as one of the few sustainable approaches globally.