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Student Loans

Volume 603: debated on Tuesday 15 December 2015

9. What discussions he has had on the effect of freezing the threshold at which graduates repay their student loans. (902706)

I consulted on the proposal to freeze the student loan repayment threshold and received responses from a wide range of interested parties. I considered those responses, as well as a detailed impact analysis, before deciding to proceed with the freezing of the threshold.

Does the Secretary of State agree that if a commercial company had made a retrospective change to a contract in this way, costing students £6,000 in the process, there would likely be an investigation? Does he accept that, in doing so, he breached the trust of former, current and future students?

What I accept is that these were the right set of changes. I considered the responses to the consultation carefully. It is important that we strike the right balance between the interests of the students, making sure that all who have the ability have the opportunity to go to university, and the interests of the taxpayer, ensuring that we have an affordable, sustainable funding system. That is exactly what the changes bring about.

Despite the negative comments from the Opposition, can the Secretary of State confirm that this year record numbers of young people secured places at university, including record numbers of children from disadvantaged backgrounds?

My hon. Friend is right. That is true of England. We have seen a record increase to 382,000 people in the past year, and the number of students from disadvantaged backgrounds has gone up from 9.5% to 18.2% in the past five years. In Scotland we have seen a fall in the number of students because Scotland does not have a funding system that allows all who want to go to university to do so.

Given the report in The Independent on Sunday that Ministers in the Cabinet Office are desperately trying to find ways to increase the cap on tuition fees without proper debate and a vote in this House, can the Secretary of State confirm that any attempt to increase the cap on tuition fees will come back to this House for a full debate and vote? Can he also confirm that Government proposals in the autumn statement to extend tuition fees to nurses, midwives and students of allied health subjects will be subject to a proper debate and a vote in this House?

If the Government do decide to change the caps on tuition fees, there will, of course, be a debate in this House.

Does the Secretary of State agree that retrospectively changing the terms of a contract is, in effect, mis-selling? Will he guarantee that in this Parliament there will be no further changes to either thresholds or interest rates?

The changes in question are entirely lawful. That is the advice that I received and it is perfectly consistent with the aims. Hon. Members should remember that the loans that are provided are on significantly better terms than those that are available commercially, and they achieve the objective of allowing all those who wish to go to university and who have the ability to do so.