Student Loans: Interest Rates Debate

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Department: Ministry of Defence

Student Loans: Interest Rates

Lord Baker of Dorking Excerpts
Monday 11th September 2017

(7 years, 1 month ago)

Lords Chamber
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Viscount Younger of Leckie Portrait Viscount Younger of Leckie
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There have been rumours in the press about a review but I cannot really confirm that at all. We believe the balance is right between making sure that the interest rates are right and that we encourage people to go to university.

Lord Baker of Dorking Portrait Lord Baker of Dorking (Con)
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My Lords, when we introduced student loans back in the 1980s, we did so because the Treasury would not accept a student tax. It would be a much better way of dealing with this problem because it is not strictly a loan; it is a lump of government expenditure that is passed from the Department for Education to a student, who then passes it on to the university. That is the amount that I believe a student should pay without any interest at all, and that is what would happen if we had a student tax in this country.

Viscount Younger of Leckie Portrait Viscount Younger of Leckie
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I note the fact that the noble Lord has raised.