Labour has promised to overhaul changes to the student loan system being planned by the Conservative government in a way that could reduce monthly repayments for graduates.
Bridget Phillipson, the shadow education secretary, said on Friday the tuition fees system was “broken”, but repeated the insistence by her party leader, Keir Starmer, that Labour would not be able to afford to scrap fees altogether.
Starmer’s decision to drop the promise to end fees caused anger among students and on the Labour left. But Phillipson’s comments in the Times give the first sense of how the party may seek to win those voters back.
Phillipson said: “The Conservative tuition fees system has long been broken, and their latest set of reforms will make it worse.”
She added: “Plenty of proposals have been put forward for how the government could make the system fairer and more progressive, including modelling showing that the government could reduce the monthly repayments for every single new graduate without adding a penny to government borrowing or general taxation – Labour will not be increasing government spending on this.”
Under the plans announced by the Treasury last year, graduates will have to start repaying their loans when they earn £25,000, rather than £27,295, and will have to continue repaying for a maximum of 40 years rather than 30. Interest rates will be cut for new borrowers and tuition fees capped at £9,250 for another two years.
The measures are predicted to double the number of graduates who pay off their loans in full, and save the government tens of billions of pounds. But lower earners will have to pay significantly more, thanks to the reduction in the lower repayment threshold.
Phillipson said: “The Tories’ choices are hammering the next generation of nurses, teachers and social workers; of engineers, of designers and researchers.” But she did not go into detail about how Labour would change the system, or how the party could reduce monthly repayments without spending public money to do so.
Phillipson’s promise, however, has not defused anger among many in the Labour party over the decision to drop the promise to end the fees system altogether.
Fabiha Askari, vice-chair of the National Labour Students Committee, said: “When Labour committed itself to abolishing tuition fees in 2017, hundreds of thousands of students flocked to the Labour party. As more young people find themselves disillusioned with Westminster politics, Labour should make commitments that seek to build a broad coalition of voters to kick out the Tories and their failed policies.”
A spokesperson for Momentum, the leftwing grassroots campaign organisation, said: “Once again we are seeing a worrying poverty of ambition from the Labour leadership. The proposed cuts to repayments will still leave young people facing mountains of debts, even as they already struggle with sky-high rents.”
