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Ministers lay out plans to reduce gap between poorest and most affluent pupils – UK politics live | Politics

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The education secretary is asked about growing anger over the rising cost of student loans since the chancellor’s decision last November to freeze the salary threshold for “schedule 2” student loan repayments for three years.

Rachel Reeves said the salary due to repay Schedule 2 student loans will be frozen at £29,385 for three years from next April. This means borrowers will have to pay even more for their student loans as they benefit from pay increases.

Plan 2 loans were taken by students in England starting university between September 2012 and July 2023, and students starting in Wales since September 2012. Graduates have to pay back 9% of everything they earn above a certain threshold (currently £28,470 a year).

Interest on loans is charged up to RPI inflation plus 3%, depending on how much the graduate earns. The Conservative Party, which introduced the loans to the coalition government, has now promised to limit the rate of loans to the retail price index (RPI), in a move that will further increase the pressure on the Treasury.

When asked on Sky News how he would help provide loans to two graduates with large amounts of debt, Phillipson said:

double quotesNow I understand the problem. I see the problem in reality, as a government you need to look at priorities, what you can do and how fast you can do it. This is really difficult, given our situation with public finances.

Phillipson said he would introduce maintenance grants to less well-off students. “The repayment threshold is rising this year. It will then be frozen in future years.”

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