Tories would scrap high interest on student loans, says Kemi Badenoch

Kemi Badenoch said the Conservatives would abolish real interest rates on plan 2 student loans; Labour’s education secretary Bridget Phillipson acknowledged problems with the plan but prioritised maintenance grants for poorer students.

Kemi Badenoch said the Conservatives would remove real interest rates from plan 2 student loans and described the current system as an "unfair debt trap." The comments came as Labour ministers acknowledged flaws in the plan 2 system but emphasised other priorities, including restoring maintenance grants for poorer students. The row has grown since the chancellor froze the repayment threshold for plan 2 loans last November. Opposition and government spokespeople have traded proposals and warnings about possible effects on universities and course provision. Key points: - The Conservatives said they would abolish real interest on plan 2 student loans, which can cause loan balances to grow faster than repayments. - Bridget Phillipson acknowledged problems with the plan 2 system and said the government’s focus is on maintenance grants for poorer students. - Shadow education secretary Laura Trott said loan interest should not rise faster than RPI inflation and said funding would come from cutting some university courses she sees as poor value. - Treasury minister Torsten Bell warned that such course cuts or large reductions in student numbers could have serious consequences for universities. Summary: The exchange has sharpened political debate over the cost of higher education and the design of student loan repayments. Conservatives called for action at the spring statement, while Labour highlighted other priorities and pointed to flaws in the inherited plan 2 system. Undetermined at this time.