Oral Answers to Questions

Patricia Gibson Excerpts

Monday 31st January 2022 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP)]

3. What recent assessment he has made of the adequacy of (a) student and (b) graduate finance in the context of the cost of living.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

21. What recent assessment he has made of the adequacy of (a) student and (b) graduate finance in the context of the cost of living.

[The Minister for Higher and Further Education (Michelle Donelan)]

We have frozen maximum tuition fees for the fifth year in succession, saving a typical full-time student finishing a course in the 2022-23 academic year over £3,000 in fee loans for the three-year degree. Maximum grants and loans have increased by 3.1% for the current academic year, with a further 2.3% increase announced for the next academic year.

[Michelle Donelan]

As I said, this will be the fifth year in succession that maximum fees have been frozen, saving a full-time student finishing a course over £3,000. With median non-graduate salaries at £25,000, it is right that we work to make the system sustainable and fair for the taxpayer, including those who do not choose to attend university, especially when only a quarter of those currently starting a course will actually fully repay their loan.

[Patricia Gibson]

Despite what the Minister said, the fact is that the Government have broken yet another promise that the student loan repayment threshold would be frozen. That means that, when student loan repayments are taken into consideration, together with the national insurance tax hike, graduates earning just over £27,000 a year will pay a marginal tax rate of an eye-watering 42.25%. Will the Minister explain to the House why she thinks that is fair?

[Michelle Donelan]

It is important that we strike a fair deal for students, graduates and the taxpayer. Only a quarter of those who take out a loan now will fully repay it, and as the hon. Member knows, the terms of these loans are very different from commercial loans. For instance, if someone loses their job or their salary reduces, their payments will change immediately.