Student loan early repayment penalties abolished

By Sarah Engle, Mon 20 Feb 2012 - Published in Loans

Plans to impose a penalty on people wanting to pay back their student loans early have been abolished by the government.

It had originally been proposed to punish those wanting to clear their debts within the 30-year period after leaving university. Ministers believed this would prevent the rich quickly wiping out all their outstanding student loan but it had been criticised as many middle-earners also wanted to be rid of the debt before the existing timeframe.

However, the plans have been damned by the University and College Union (UCU) as it is perceived as another method to help the wealthiest within the society. Since the introduction of higher tuition fees the rate of student loans has had to be adjusted to meet the required payments.

The UCU believes that the government should be more focused on helping the poorer students afford to go to university rather than assisting the rich.

Sally Hunt, the union's general secretary, said: "While no one would condemn any family that sought to pay off their children's debt as fast as possible, today's move simply exposes yet again what an inconsistent mess the higher education reforms are."

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