Students Vent Their Anger Online Over Rise In Loan Interest Rates

Tue, 04 Sep 2007

The news that interest rates on UK student loans will double to 4.8 per cent have provoked online protests, with students arguing their case through the social networking and hugely popular website - Facebook .

Interest Rates on Student Loans to Double - a group of 16 students, was set up last week by University of East Anglia graduate Paul Graves in an attempt to draw attention to the imminent rises, which he feels are being "carried out stealthily with little news coverage and no information given by the Student Loans Company to date" .

Last week a Facebook group - the Great HSBC Graduate Rip-off! - succeeded in forcing the bank to its decision to axe interest-free graduate overdrafts . HSBC had no choice but to give in to the protesters' demands after more than 5,000 angry graduates vented their fury at the bank and threatened to take their custom elsewhere.

Graves said, "Facebook seemed like the ideal platform to launch this campaign . The massive explosion in its use, particularly from students and graduates, means it can directly inform the very people [the issue] is affecting."

Ian McLaren Thompson, spokesman from the Student Loans Company (SLC), explained that its interest rates were calculated annually in September on the basis of the March Retail Price Index (RPI).

"Using this figure allows us to get a true reading of the value of what has been lent as the value of the pound fluctuates. It does not, and is not intended to, produce any surplus for us," he said.

Loan repayments are calculated on the basis of what a borrower earns and not by what they owe – meaning that while the total amount owed will increase faster with the new rates, actual payments will be unaffected, although it could take longer to repay the loan .

But graduates have been quick to label this as an "education tax" in disguise.

Thompson responded to the Facebook group by saying: "It's always a bit perplexing when people don't have the full facts, so we're not really in a position to respond to the group."
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.

 

 

SimplyHealth Dental Plan
Get covered from £7.70 per month!
Amex Cash Back
Credit Card
Get 5% cash back on purchases with Amex
Income Protection Insurance
Get an instant quote with the award winning company

Paying Too Much?

7 out of 10 people are paying too much for their mortgage. To find out if you're one of them click here or fill out a FREE no obligation enquiry form