If you’re a graduate and are wondering what the hell is going on with your student loan repayments, you’re not alone.
An open letter by engineering graduate Simon Crowther has gone viral, after he criticised the ‘underhand’ changes to his student loan interest rates.BBC showed Last Whites of the East End and people said it was racist
Simon started university in 2012 – making him among the first batch to pay the increased tuition fees of £9, 000 a year.
Addressing the letter to Vernon Coaker, his local Labour MP, he writes that graduates ‘feel we have been cheated by a government that encouraged many of us to undertake higher education, despite trebling the cost of attending university’.
The current interest rate on student loan repayments for students who have started since 2012 is 3.9 per cent.
When they agreed to study, and therefore to the loan, Simon writes they were ‘told our loans were around 0.5 per cent interest’.
I took out a student loan at the age of eighteen to study Civil Engineering at the University of Nottingham. Unfortunately, I was in the first cohort year of undergraduates who were charged the increased fees of £9, 000 per year, from £3, 000 – a huge hike in student fees. When I took out the student loan, we were told the loan was at a very low interest, and at the time was around 0.5%.
I was still in the Sixth Form at school, when I agreed to the student loan. I had no experience of loans, credit cards or mortgages. Like all the other thousands of students in the UK, we trusted the Government that the interest rate would remain low – at around 0-0.5%.
I graduated with a huge debt of around £41, 000.
We have just learned of the underhand way, the Government has sold our loans to a private company which has caused the interest rate to skyrocket. At no point was I consulted about this, and of course I would never have agreed to this enormous increase in fees.
Now graduates, we feel we have been cheated by a government who encouraged many of us to undertake higher education, despite trebling the cost of attending university.
The current interest rate is now around 3.9%. We were told our loans were around 0.5% interest. I am now lucky enough to own a property, and my mortgage is around 3% – less than my student loan.
Simon then calculated that a graduate in his year would apparently need to earn at least £41, 000 in order to cover the higher interest rates.
‘This is a disgraceful act by a government which encouraged us when at school, to go on to higher education – helped by a government loan with the promise of a low interest repayment scheme, ’ he said.
‘Along with many of my former university colleagues, we have lost our trust in this government.’His status has been shared thousands of times (Picture: Simon Crowther/Facebook)
Clearly the letter has struck a chord with a lot of people.
Since he posted it two days ago, the Facebook post has been shared more than 50, 000 times.
However, a spokesperson from the Student Loans Company told Metro.co.uk that the loan has not been sold, and the current rates were in force in 2012.Tuition fee letter from 2003 has come back to haunt George Osborne
‘It is not the case that this individual’s interest rate has increased or that their loan has been sold, ’ they said. ‘The variable interest rates that would apply to his student loan are unchanged from those in force at the time of his application in 2012.
‘All students that take out a loan must sign a declaration confirming that they have read the terms and conditions of the loan before it will be paid.
‘These terms and conditions clearly set out the interest rates that the student will be charged, when they will start repaying and when interest starts accruing.’