Labour MP with £50,000 in student debt calls on Starmer to reform loans system
A Labor MP who is among millions of graduates grappling with mounting student debt has joined a growing chorus of senior figures within the party pressuring Sir Keir Starmer to reform the “absolutely broken” system.
Labor MP Chris Hinchcliff said he had no prospect of paying “anything but interest” on his loan before becoming an MP and that he now owes £50,000 – £10,000 more than he owed when he graduated in 2015.
He is one of a number of MPs calling for Sir Keir to reform the UK’s student loan system, as millions of young workers taking out Schedule 2 loans face a debt spiral due to financial deals they consider “unfair”.
While the Prime Minister has vowed to make the system fairer, Labor MPs including Karl Turner have called on the government to act faster and “put together a swift and sharp plan to resolve this sorry mess”, while former education minister Charles Clarke said: Independent The system needs “urgent” reform.
Speaking about his own experience with a Schedule 2 student loan, Mr Hinchcliff said: Independent: “I would have left university with around £36,000 in debt. When I looked at the last year and paid it off a bit with an MP job, I was £50,000 in debt.”
He said this income had “increased every year” while he was working in his previous job in the charity sector, adding that graduates were effectively “paying additional income tax” for life.
He said constituents across the board had voiced concerns about the issue, including parents who now felt they were “giving their kids the wrong advice” about going to college. “I certainly understand because I’ve been through that pain myself and I agree there needs to be reform on this issue,” he said.
The North East Hertfordshire MP called on the government to consider reducing interest rates on such loans as “an urgent area where people think it is deeply unfair” and to consider whether they are using the right measure for inflation.
“I urge the government to reform the parliament to make this system more fair,” he said.
“The entire system that the Conservatives and Liberal Democrats have introduced is a massive failure and needs to be addressed from top to bottom.”
The Chancellor was branded a “usury” by campaigners after announcing a three-year freeze on the repayment threshold; This led to some people having to pay back much more than the initial high-interest loans.
On Wednesday Sir Keir told the House of Commons he would look at ways to make the credit system fairer, but Ms Reeves said it was unlikely any changes would come in next week’s spring statement.
But while Labor MPs are calling on the government to act faster, Kingston upon Hull East MP Karl Turner says: Independent He said Starmer and Reeves needed to “come up with a quick and sharp plan to sort out this sorry mess”.
He said: “Voters expect instant happiness. Gone are the days when we could reasonably claim that this mess was caused by the previous Conservative and Liberal Democrat coalition government in 2013. Our Labor government must act now to address the gross injustice of the student loans system we inherited.”
Former education minister Charles Clarke told Independent: “I think the system needs urgent reform. The system established in 2011 had serious flaws at the time, and they have only gotten worse since then.”
Meanwhile, Labor MP Kim Johnson said the “cat is out of the bag” when it comes to the student loan system and called on ministers to make a U-turn in the coming days.
he said Independent: “There is an urgent need to look at the value for money of student loans – and Ministers may choose to announce a U-turn next week. They should. Because this system is not only broken; it is actively fueling the injustice and inequality at the heart of our stagnating economy.”
Another Labor MP, Rosie Wrighting, who received a Schedule 2 student loan, said she was now facing £90,000 worth of student loans.
“We were told that education was the path to opportunity. Instead, many of us graduated into a system where our loans grew faster than our wages when inflation caused by the Liz Truss mini-Budget sent interest rates soaring to a level no graduate salary could realistically cope with,” he wrote on social media.
Consumer champion Martin Lewis also called on the chancellor to reverse his decision on student loans.
Appearing on ITV’s Good Morning Britain on Monday, he said the changes would be struck down by the regulator if a commercial company tried to make them.
Kemi Badenoch and Mr Lewis met to discuss student loans on Wednesday afternoon, following a heated exchange on the issue on Monday’s TV show.
The government has previously said it was inheriting the student loans system from the previous Tory government and said threshold freezes were introduced “to protect taxpayers and students, as well as future generations of students and workers”.
