The Labour party have pledged to lower tuition fees to £6,000 and raise maintenance grants by £400 if they are voted into government.
Ed Miliband has said that his party would lower fees as of September 2016 in a move that, he says, would ‘benefit those starting courses next year’ and ‘will benefit those already at university.’ The maintenance grant, set to rise by £400 to £3,800 for families paying the basic rate of income tax, will apply to students already at university.
With an estimated cost of £2.7 billion a year, the policy would be funded by changes pension tax relief.
The shadow chancellor, Ed Balls, confirmed that the interest rate on student loans would be raised from 3% to 4% for those earning above £42,000 a year.
Critics have argued that the £6,000 policy would benefit high earners because the reduced amount would mean that they would be able to repay their loans faster.
Chancellor George Osborne said: “Ed Miliband’s sums don’t add up because the universities would get less money and there would be fewer students so it’s bad for students, bad for universities, bad for the taxpayer and bad for the British economy.”
Ed Miliband, speaking in Leeds, argued: “the average reduction in the debt will be around £9,000 per student…And the national debt, the burden on taxpayers, will be cut by £40 billion by 2030.”
In their statement, the Labour party said that the £6,000 fees policy means “students who are now in their first year at university will see their fees capped at £6,000 in their third year. Students who start university this autumn will see their fees capped at £6,000 from their second year onwards. And students who start in 2016 will see their fees capped at £6,000 from the start.”
They went on to stress how universities would not ‘lose out’: “Our plan is fully funded, so we will increase the teaching grant universities receive by the same amount that their fee income from English students falls – around £2.7 billion.’
Laura-Jane Tiley, Online News Editorbookmark me