Student loan penalty plan abandoned in UK
February 16th, 2012 - 9:33 pm ICT by Aishwarya BhattLondon, Feb 16 (THAINDIAN NEWS) A controversial measure by the UK government to punish students who pay off their student loans early has been abandoned, several media outlets report. The government was expected to announce next week that wealthier students who pay off their loans shortly after college will be required to pay punitive fines.
The measure was originally intended to discourage the early payment which cuts the payment of interest. About 5 percent of students who take the loans pay the amount off early without taking the 30-year option.
The proposal was introduced by the Liberal Democrats and had the full support of the Business Secretary Vince Cable. The bill which is described as “progressive” would have come into effect from next year.
BBC reported that the administration decided to drop the proposal because the poor would have been the most affected. UK student fees is expected to go up to as much as £9,000 per year but the various universities are expected to consider students from the poorer backgrounds.
A new measure which comes into force this year will require all students who earn up to £21,000 annually to repay their loans. Any outstanding balance after 30 yaers will automatically be written off.
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Tags: bbc, controversial measure, liberal democrats, london feb, media outlets, proposal, student loan, student loans, uk government, uk london, universities, vince cable