Hidden in the small print of November's Autumn Statement, the government announced it would retrospectively hike student loan repayments for all English students who've started since 2012. This disgraceful move that goes against all the principles of good governance.
I've already hired lawyers to look into whether a legal challenge is possible, but this is just as much a moral issue as a legal one. So today I've sent the following letter to the Prime Minister to ask him to take a personal interest. For more information on how this works and who'll be affected see my I've hired lawyers about student loans blog.
Dear Mr Cameron,
I feel compelled to write to you over the decision to retrospectively change the terms of student loans.
In 2011 I was appointed head of the Independent Taskforce on Student Finance Information. I worked with your ministers who said, unambiguously, that from April 2017 the £21,000 repayment threshold would start to rise annually with average earnings. This information was then communicated to students and formed a core part of the calculations about how much university would really cost them - including in student loan repayment calculators.
The decision to backtrack on this is hugely damaging. It means many lower- and middle-earning graduates will repay thousands more over the life of their loans.
However, even more important than the additional cost is the message this sends. The regulator would not allow any commercial lender to make a change to its terms this way. It is therefore surely wrong for the Government to do so - retrospective changes have always been seen as bad governance.
Of course there was a consultation before the change. I and many others responded to it. Yet only 5% of consultation responses were in favour of this change; 84% were against it - so I am confused why, despite such cross-society opposition, your Government pushed ahead with the retrospective change anyway?
As you may be aware, I have engaged lawyers who are currently looking at whether this change can be challenged legally. Yet this is just as much a moral issue as a legal one. A retrospective change will destroy any trust current and future generations can have in the student finance system, and perhaps, even more widely, in the political system as a whole.
The repercussions of this loss of trust may be far-reaching. Although I had reservations about the student finance changes made in 2012, I always believed it was more important to explain the practical realities of the system so no student was wrongly put off due to misunderstandings. But how can anyone in good conscience now explain student finance to young people when the system can be unilaterally changed, even after they've signed their loan contracts?
I ask you to take a personal interest in this decision and look at reviewing it. Present and future generations must be able to trust the Government to keep its word on student finance.
I would also ask to come and meet you to discuss this issue, and invite some affected students, graduates and their parents. That way we can explain why we think this is so important - and to see if there is a way the damage can be mitigated.
Founder of MoneySavingExpert.com and former head of the Independent Taskforce on Student Finance Information