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<p>The system of variable interest rates based on income is progressive, and ensures
that higher earners make a fair contribution to the sustainability of the higher education
system.</p><p> </p><p>Student loan interest rates vary with income. Only borrowers
earning over £45,000 and those in study pay the maximum interest rate of 6.3% and
many will be charged less than this. The system of variable interest rates help ensure
that the highest earners make a higher total contribution than those on lower incomes.</p><p>
</p><p>Reducing interest rates would benefit high earners only. That is why the government
has increased the repayment threshold from tax year 2018-19 and will increase the
repayment threshold again in April 2019, reducing monthly repayments for all borrowers
earning above £25,000.</p><p> </p><p>We believe that it is right that students should
contribute to the cost of their higher education and that this contribution should
be linked to their income. This means that those who have benefited the most from
their education repay their fair share.</p>
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