Student Loan Repayment Plans
Tom Rutland Excerpts(6 days, 14 hours ago)
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Tom Rutland (East Worthing and Shoreham) (Lab)
It is a pleasure to serve under your chairmanship, Ms Lewell. I want to thank my constituents Matthew, Courtenay, Frances, Giovanni and Veronica, who have contacted me recently about this, and parents such as Joanne who are worried about generational inequality.
There are, to my mind, two problems with the plan 2 loan system. The first is psychological. It is incredibly depressing for people to see the amount that they owe continually increasing, despite making payments that can constitute hundreds of pounds each month. The second, more important one is financial. Under plan 1, as my earnings grew, I was making increasingly large monthly payments towards my student loan, but I knew that this was a temporary situation and I would eventually be debt-free. For those on plan 2 loans, it is not anything like so temporary, primarily due to the size of the principal and the higher rate of interest it attracts.
That has a real impact, because the economic circumstances students are graduating into today are a world apart from those of their predecessors, who enjoyed free higher education. Today’s graduates face higher housing costs and a reduced graduate wage premium compared with previous generations. Those factors combine with high monthly repayments to reduce disposable income and leave young workers in stasis, living at home with their parents or in shared rental accommodation, perhaps partnered and wanting to start a family but unable to afford to do so.
We have inherited this broken system, but we have the opportunity and responsibility to fix it, making changes to increase the monthly disposable income of graduates by raising the repayment threshold or staggering the percentage of income above the threshold that is repaid, and looking at the interest rate paid falling at a minimum to RPI or, ideally, to CPI, given that the Government are phasing out RPI.
Oral Answers to Questions
Tom Rutland Excerpts(3 months ago)
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Bridget Phillipson
We are investing the international student levy into support around skills and access to high-quality further and higher education colleges targeted at students who most need that support in subjects most closely aligned to our industrial strategy and Government priorities. That will make a huge difference to young people from not very well-off backgrounds, allowing them to access university. We are backing our universities with the measures that we have set out on tuition fee increases, which will give our institutions stability.
Tom Rutland (East Worthing and Shoreham) (Lab)
Bridget Phillipson
The Conservatives might not be serious about tackling child poverty, but the Labour party is and always has been. This Government will lift 450,000 children out of poverty, alongside other measures such as Best Start family hubs, expanding childcare and new free breakfast clubs—[Interruption.]
Oral Answers to Questions
Tom Rutland Excerpts(1 year, 2 months ago)
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Catherine McKinnell
The hon. Lady raises an important point. We are working at pace to ensure that we have more professionals, along with the Department of Health and Social Care, which is also ensuring that we have the right workforce to support all children with special educational needs. I will write to the hon. Lady with specific details of the steps being taken.
Tom Rutland (East Worthing and Shoreham) (Lab)
Catherine McKinnell
Local authorities have a statutory duty to ensure that there are sufficient secondary school places and that children can go to school, and travel should not be a barrier to their getting to school. I know how important this issue is for parents, and I would be happy to arrange a meeting for my hon. Friend to discuss it further.
Oral Answers to Questions
Tom Rutland Excerpts(1 year, 3 months ago)
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Stephen Morgan
I met Helen Blythe last week, and I will happily meet the hon. Member to take forward her concerns.
Tom Rutland (East Worthing and Shoreham) (Lab)
I thank the Minister for working with Treasury colleagues to secure important additional funding to rebuild schools in last week’s Budget. Will he meet me to discuss the serious repair issues facing St Nicolas and St Mary primary school in my constituency, which are hampering children’s ability to thrive?
Stephen Morgan
We are proud of the investment that we are making in school buildings. I would be delighted not only to meet my hon. Friend but to visit his constituency.