LONDON, ENGLAND - NOVEMBER 04:  Protestors march past the Houses of Parliament during a protest against education cuts and tuition fees on November 4, 2015 in London, England.  University students from across the country are marching on the streets of London to protest against cuts to free education. After a rally outside what was the University of London Union, the march will take in Parliament Square, Millbank - occupied by student protesters five years ago - and end in front of the Department for Business, Innovation and Skills (the department responsible for universities).  (Photo by Rob Stothard/Getty Images)
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Last year, George Osborne changed the small print on student loan repayments for millions of UK students who graduated after 2012. Freezing the loan repayment threshold at £21,000 for five years instead of letting it rise with inflation as first promised will saddle them with higher-than-expected monthly payments.

The government argued that the terms and conditions allowed it, but founder Martin Lewis highlighted it as unethical, calling on the new chancellor Philip Hammond to scrap the change at the Autumn Statement on Wednesday.

“How can anyone in good conscience now explain student finance to young people when the system can be unilaterally changed, even after they have signed their loan contracts?” he wrote in his first column for FT Money.

More than a hundred readers responded to Mr Lewis’s piece, from young people struggling with student loans to parents and small business owners. Here are some of the most compelling responses.

Readers with student loans respond:

“I’m 22 and was the first to be hit by student loans. At present I pay £100 per month out of my salary, which is about half of my entire discretionary income for the month, to repay my student loan.

“It isn’t even covering the interest payments — so the loan liability is growing. I was promised when I took this loan out that the payments would be low, and would rise in line with inflation. Now I find that they’re close to 5 per cent per annum. It is now clear that I am never going to be able to repay the loan liability that the government said I would be able to repay.

“If my company treated its clients as the government has treated me, the FCA would impose a hefty fine on the company. Sadly, the only thing we graduates have to fight this huge injustice is public opinion.” —Will

“The Student Loan Company is a disgrace. After I had fully paid back my loan, payments continued to be taken for months until I requested they be stopped. I have heard horror stories of people who had payments taken for years until they realised. A commercial bank doing this would be on the front pages.” —ex-student

“I’m 25 and buried in student debt. I don’t have any friends who expect to pay their loans back in time. What we do expect is years of bureaucracy and anxiety for the sake of failed policy, written by people who will never have to experience the economic and emotional consequences.” —Nicholas

“I have a Masters degree and a very modestly paid job. I pay £100 a month and barely scrape the interest. Unless I get several promotions within the next 20 years, I will only just get half my loan paid off.” —A man chooses

What students think

“[The difference is] £10,800 over the life of a loan — debt that would otherwise be written off in many cases. Or £23,917 if you paid it into a pension and compounded it at 5 per cent; £65,251 if you assume 8 per cent returns (the average for equity tracker funds). In other words, it reduces their earnings in retirement by £957-£2,610 a year, depending on the investment strategy you pursue.

“If you made the same case over reducing pensioners’ triple-locked pensions by £360, everyone would be up in arms. The young can go whistle. It’s worth pointing out that virtually all teachers fall into this income bracket. Did they all do useless degrees?” — Kalias

Parents also struggle with student loans:

“As someone heading towards my pension with two children passing through the university loan system, I agree that the system is being abused by the government. There is a much bigger issue of generational inequality which needs addressing. I do not believe over the long run that we can continue to support the pension triple lock, winter fuel allowances, TV licence exemptions while taxing the young for achieving a reasonable standard of education and restricting their chances to build up wealth like the previous generation.” —Mr Plompi

“I suffer from the fact that both of my sons deferred going to university by a couple of years, and so fell from Plan 1 into Plan 2. The inequity of this inflationary rise makes one even more irascible. I recall that the salary floor was sold actively at the time by the government as one of the ways by which students could stomach the three times increase in fees. To remove it now is nothing short of criminal behaviour.” —Chrispy

Readers suggest possible solutions:

“One solution would be to charge an extra one per cent income tax on higher rate taxpayers who took a UK university degree, regardless of when. That would be fair on the younger generations and, as it appears that the UK government has no issues with changing the rules of the game, politically feasible. What a shame Clegg didn’t find this solution.” —Armchair Economist

“When I look back to my time in year 12, I was preoccupied with wanting to meet my grades for the university I had an offer for. When school friends asked me whether I had applied for Student Finance I’d say ‘of course’ because (a) that was my only option, (b) all my friends at school signed up for it and (c) the fine print was so fine. Students at that age and under that pressure should be fully informed about the consequences of being bound by such terms & conditions. If the government is reluctant to change its ways, at least the education systems should warn students of what the post-grad loan payment commitment may entail — of course, without scaring them to opt out of university studies.” —S Germain

Is university overemphasised in the UK?

“The real disgrace is that the government allowed every tin pot college to call itself a university, and lots of people don’t realise that they are NOT equal. I know a guy who [got a] sport science [degree] and is now a specialist plasterer working for a company restoring old buildings. He has the debt but would have been better off going straight into the restoration industry as an apprentice.” —DTM

“I run my own software company and have hired apprentices in each of the past three years, providing training and a career path. We pay about 30 per cent over the minimum wage, as do many other companies who hire apprentices, and these talented young people are on track to earn above the UK average income within five years of leaving school. Tax revenues are not unlimited. It is nonsense that we should allow billions of pounds to be invested in educating people in skills we don't need when we have huge skills gaps in growth areas (technology, engineering, data science) and poor productivity levels, which result in low income growth. We could invest billions in apprentice skills with the money saved by removing unfettered access to subsidised over-education. It is not elitism but common sense and fairness.” —Michael Taylor

Martin Lewis responds

“Thanks to all the FT readers who have responded to my column. The volume of comments, tweets and shares that this article has generated should show the chancellor that people are angry — and not just students, but their parents and employers too. That’s why I’ve written a submission to the chancellor to ask him to reverse George Osborne’s disgraceful retrospective hike in student loan costs in his Autumn Statement on Wednesday. He needs to return to the promise of increasing the £21,000 repayment threshold rise with average earnings from next year, rather than freezing it.

Yet, reading through the responses, I can see there are many factual myths out there on this too, due to the dire explanation and framing of the student loan system. The fact is this works more like a graduate tax (that ends when you’ve repaid it) than a loan. While those who don’t go to university earning £30,000 pay 20 per cent tax, graduates pay 29 per cent. Those at £50,000 pay 40 per cent unless they went to uni — then it’s 49 per cent, which is a better way to think of it.

I’d argue it should be renamed a “graduate contribution” — to help explanation, and also stop inuring students to borrowing. Once they start on one “loan” what stops them getting another? Many people are worried about the “interest”, yet in fact many, if not most, graduates won’t repay a lot of it, because they won’t earn enough in the 30 years before the loan wipes.”

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