More worryingly, students from the poorest background will graduate with debts of over £57,000 due to the replacement of maintenance grants with loans and the freezing of the repayment threshold.
Interest rates are charged as soon as courses begin and, reports the IFS, students will accrue £5,800 in interest charges before graduation alone. In April this year, Daniel Zeichner cautioned against one-third increases in student loan interest rates from 4.6% to 6.1% as a result of the fall in the value of the pound in the aftermath of Brexit.
From September, undergraduates at Cambridge and Anglia Ruskin will pay £27,750 in tuition fees for a three-year course. They may also take out a maintenance loan after the Coalition Government abolished maintenance grants.
Since 2012, when the Coalition increased the tuition fee cap from about £3,000 to £9,000, the repayment threshold has been frozen at £21,000 a year – making graduates worse off as a result of inflation. The lowest-earning third of graduates are now paying 30% more than in 2012.
During the 2017 General Election, Labour promised it would scrap tuition fees.
Daniel Zeichner said: ‘Under the new system, loans are written off if they are not repaid after 30 years. The IFS estimates that about three-quarters of graduates will not repay the entirety of their debt despite working into their mid-fifties. So we have a system that is unfair for the poorest students, reduces public investment in universities, and will cost the government more than it should once the punitive loans have not been repaid. Education is a public good and not a private commodity. We need to end this regressive tuition fees system.’
Chris Belfield, who authored the IFS report, said an interest rate of 6.1% is ‘very high compared with current market rates’.
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