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Martin Lewis: What's happened is that hidden in the small print of the Autumn Statement, and it was hidden in a cowardly way, was the fact that from April 2016 the student loan repayment rate will be frozen for five years. When the student loan system was changed in 2012, it was always said that from April 2016 that repayment threshold would rise with average earnings.Now this does sound rather trivial, but this is known in tax as fiscal drag and it's a very clever way of bringing in the government more money and costing students a lot more money without them realising. The government thought they could sneak it under the door posts but my intention is to not allow that to happen. If they froze it at £21,000 for 20 years, for example, then that would be minimum wage in 2035. Five years of increases in average wages would have put the threshold up to £24,000 to £25,000 but, no, it's going to stay at £21,000. If you froze it again, and again and again, then what you would have is graduates working on minimum wage in Tesco repaying their student loans.You were the head of the Independent Task Force for Student Finance Information, which advised the government on student loans, is this personal because of that?
I do feel a personal responsibility. I have worked all of my career to try to give out the best information I can; you can't always do it perfectly, but I told people in the past that this threshold would go up in April 2016; I told them that because I had it from the government, from the minister responsible himself, we were told the threshold would go up. We were told in every eventuality it would go up in April 2016. The government answered in parliament that it would go up in 2016. And I feel in hindsight that this is an objection to my being used as a mule by the government. That's why I'm doing it personally. I believe in this. I put my money where my mouth is on something like this.
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Sometimes you worry that governments like to take on groups that they know aren't going to be able to challenge them, well in this case they happened to forget that I'm sitting here… Money Saving Expert is used by 15 million people a month, we have 11 million getting my email; my TV show is the biggest consumer show on television. I do speak to middle Britain and the government is well aware of that and they thought this was going to be a niche issue and I'm doing everything I can to make this a mainstream one. And to make them realise that they've chosen the wrong target this time… Students are revolting; they often revolt. We all know that. But what governments are more scared of are middle Britain parents. No disrespect to students: but you know, students and a Tory government are used to the mass student body not liking them. If you really want to scare them: get your parents and grandparents to start complaining.Do you think the change will punish graduates on low incomes or even dissuade people from going to university altogether?
When you actually look at the impact of this, while it will hit everyone's cash flow, it will be those on lower to middle incomes that will be hit hardest by this. Low and middle earners won't clear the debt in the 30 years before it wipes, so what really counts for them is what they pay a month; this policy will increase what they pay a month compared to what they would have paid. Higher earners, will be able to clear the debt more quickly and will – this is crucial – have less interest on it to pay off. They will therefore save money. This policy hurts everybody's cash flow but directly increases the total cost of going to university for those who will earn a lower or middle-income salary. That's known as a regressive system: it benefits the rich and penalises the less well off graduates once they leave.
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