Student Loans: Interest Rates

Lord Baker of Dorking Excerpts

Monday 11th September 2017 Lords Chamber

[Viscount Younger of Leckie]

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 (Con)]

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]

I note the fact that the noble Lord has raised.