Labour Lords will fight student loan repayment 'scandal'
Labour MP and ex-NUS president Wes Streeting says party peers will fight a change to student loans repayments that is set to see graduates lose out.
The Higher Education and Research Bill will have its second reading in the House of Lords on Tuesday. Nick Hillman, the Director of the Higher Education Policy Institute, has pointed out that major pieces of higher education legislation only tend to arrive around every 12 years, so it’s incredibly important to use the opportunity to get this Bill right.
It was welcome that Jo Johnson accepted the principle in the Commons stages that there should be student representation on the board of the new Office for Students. As someone who spent time scrutinising the Bill at committee and report stage, I can still see a number of areas that need serious improvement which I hope the Lords will be able to achieve.
The mis-selling of student loans by the government affects millions of students and is one of the key issues that Ministers are currently neglecting. In last year’s Autumn Statement, George Osborne announced that the repayment threshold on student loans would be frozen at £21,000 from April 2017, instead of being uprated in line with earnings – as was promised in marketing materials and in writing from the then Higher Education Minister, David (now Lord) Willetts.
Students and their families are rightly outraged that the change was made after they took out their loans, and this kind of behaviour in the private sector would not be tolerated by regulators. Trust in politics is still a huge issue – actions like this make rebuilding that trust harder.
I’ve been working closely on this issue with Martin Lewis at MoneySavingExpert.com to produce what I’ve called the ‘Martin Lewis Amendments’. The amendments seek to strip Ministers of their power to make negative changes to the terms of student loans after they are taken out, and also bring loans under regulation by the Financial Conduct Authority.
This scandal has also been raised by the Lords Economic Affairs Committee Chairman Lord Hollick, who is still yet to get an answer on why the government thinks treating students in this way is acceptable.
I’m glad that Labour’s frontbench in the Lords will be taking up this fight. The government should not expect an easy ride over the passage of this Bill, and I know that Lord Wilf Stevenson will do a great job in tackling this important Bill with the support of colleagues in both chambers. Students everywhere are counting on it.
Wes Streeting is the Labour MP for Ilford North