Cor­byn plan to erase stu­dent debt ‘is just an am­bi­tion’

The Guardian - - NATIONAL - Pe­ter Walker

John McDon­nell has rowed back slightly on Jeremy Cor­byn’s pre-elec­tion sug­ges­tion that Labour could wipe out ex­ist­ing stu­dent debt, say­ing this was “an am­bi­tion” for the party in power but would not nec­es­sar­ily hap­pen.

In an in­ter­view with the New Mu­si­cal Ex­press shortly be­fore last month’s elec­tion, Cor­byn said Labour would “deal with” the debt of stu­dents who had al­ready taken out loans for tu­ition fees.

It did not seem fair that those who “had the his­tor­i­cal mis­for­tune to be at univer­sity” dur­ing the pe­riod of £9,000-plus an­nual tu­ition fees should be bur­dened with such debts, Cor­byn ar­gued. He said Labour would look at “ways that we could re­duce that, ame­lio­rate that, lengthen the pe­riod of pay­ing it off, or some other means of re­duc­ing that debt bur­den”.

But McDon­nell, the shadow chan­cel­lor, said that while Labour re­mained com­mit­ted to abol­ish­ing tu­ition fees, the debt wipe­out idea – which was not in the man­i­festo – would have to be closely looked at.

“What we’ll be do­ing is invit­ing peo­ple to come and ad­vise us: we’ll try and en­sure we use econ­o­mists as well as ed­u­ca­tors,” McDon­nell told BBC1’s An­drew Marr Show, say­ing en­act­ing the pledge would cost about £100bn. “The prob­lem that we’ve got is the sys­tem is im­plod­ing. Half of the stu­dent debt, we now know, is not go­ing to be paid back.”

Asked if the pol­icy would hap­pen, McDon­nell said: “We’ll look at what we can do. It’s a real am­bi­tion. What Jeremy said is we recog­nise young peo­ple are com­ing out of col­lege now with debts of £50,000. They can­not even think about buy­ing a house or get­ting on the prop­erty lad­der. So we’ve got to tackle that. But the is­sue is, the sys­tem’s got to be tack­led any­way, be­cause it’s fall­ing apart.”

McDon­nell said Cor­byn’s pre-elec­tion in­ter­view “wasn’t a prom­ise”. He said: “We’re go­ing to try to. It’s a real am­bi­tion of ours. I don’t want to prom­ise some­thing we can’t de­liver, I want to be straight.

“Let us just be clear. What we said in our man­i­festo was we’ll scrap tu­ition fees. We will scrap tu­ition fees. If we can help deal with the debt we cer­tainly will. And be­cause the sys­tem is col­laps­ing, to be frank who­ever is in gov­ern­ment is go­ing to have to deal with this.”

De­bate over the scale of stu­dent debt has been height­ened by an anal­y­sis pub­lished this month which said stu­dents from the poor­est 40% of fam­i­lies en­ter­ing univer­sity in Eng­land for the first time this Septem­ber would emerge with an av­er­age debt of £57,000, while those from the rich­est 30% of house­holds would run up lower av­er­age bor­row­ings of £43,000. The In­sti­tute for Fis­cal Stud­ies said the abo­li­tion of the last main­te­nance grants in 2015 had dis­pro­por­tion­ately af­fected the poor­est.

Re­pay­ments on tu­ition fee loans be­gin when grad­u­ates earn more than £21,000, and they must re­pay 9% of their salary above this level. Af­ter 30 years, any out­stand­ing stu­dent debt is writ­ten off.

With the to­tal debt now above £100bn, it is es­ti­mated that many loans will never be re­paid.

John McDon­nell said the sys­tem of tu­ition fees was col­laps­ing, and that who­ever was in gov­ern­ment would have to deal with the prob­lem

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