Student Loan Interest Rates Debate
Full Debate: Read Full DebateLord Porter of Spalding
Main Page: Lord Porter of Spalding (Conservative - Life peer)Department Debates - View all Lord Porter of Spalding's debates with the Department for Education
(8 months, 3 weeks ago)
Lords ChamberI think the noble Lord knows the answer to his question: it is not appropriate to compare mortgages with student debt, which is unsecured and expires and does not have to be repaid in full. The noble Lord shakes his head, but he can do the maths: a mortgage is asset-backed, and one has to repay it; a student loan is not asset-backed and expires. As the noble Lord knows, under the current system, the vast majority of students do not repay it in full.
My Lords, I declare that I have a number of children and grandchildren who are suffering from the ridiculous regime of charging students interest at a stupid rate, when the Government could have controlled that debt book. Does my noble friend not agree that it would be far better for the youth of our country and the future of our own Government if we put that debt book back on to a public works loan board or something equivalent? The level of intergenerational unfairness in this country is outrageous, and we are fuelling it. It is ridiculous.
I am afraid I cannot agree with my noble friend. The debt repayment levels are dependent on income, and, as I said to the noble Lord, Lord Sikka, we expect that under the new plan 5 loans 61% of new full-time borrowers will repay their loans in full, with the balance being subsidised by the taxpayer. A recent graduate on a starting salary of £26,000 will repay £7 a month.