Interest On Student Loans Could Soon Be Scrapped

student loan
A new report has advised that interest on student debt should be scrapped (Shutterstock)

Most of us leave university with mountains of debt to our name, which we’ll spend a good part of our lifetime paying back, with added interest on top, of course.

However, we could soon see the end of additional charges on our loan repayments, if fresh advice from a political think thank gets thrown into action. A report from UK2020 has called on the government to scrap all interest on student loan debt, making it easier for graduates to manage and repay their financial burdens.

It also wants to extend the amount of time people are given to pay off their debt, increasing it from the current 30 years to 50 years, claiming it would save billions of taxpayers’ money. At present, graduates have their debt wiped if they don’t pay the full amount back within 30 years.

In the report, former Minister of State for Education Andrew Adonis says: “For too long universities have had free rein to grab as much as they can from students, graduates and the taxpayer with precious little regard for the value they provide.”

This news comes in the same month Theresa May pledged to freeze tuition fee prices “for the foreseeable future” as well as raise the repayment threshold to £25,000 — meaning you won’t have to pay back a penny until you’re earning that amount per year.

If today’s advice does turn into actual policy, this could help an already struggling generation of students who are leaving university with an average £50,000 debt to their name, according to the Institute for Fiscal Studies.

Orignaly published on 30th October 2017