Graduates would get 10% discount for repaying student debt early under Conservatives

Under plans put forward by the Conservative Party, graduates in England would be offered a 10% discount on early repayments of their student loans, the Guardian tells us.

The plans, which aim to raise the £300m needed to fund an additional 10,000 university places next autumn, would allow graduates who made an early debt repayment of above £500 over the next three years to get the discount.

This year, there were 60,000 more applicants than last year, but the Government was ‘forced to cap numbers’ at just 3,000 more than 2008 after finding a ‘£200m black hole in its finances’.

David Willets, the shadow universities secretary, said: “This summer has seen a crisis in university places.”

Wes Streeting, President of the National Union of Students, said: “We welcome the Conservatives’ creative solution to a serious short-term problem. This year saw unprecedented demand for a limited number of places, meaning significant numbers of well-qualified applicants lost out.

“Given that demand is set to increase further still next year, the commitment to providing additional, fully funded places, is incredibly important.

“We would be concerned if this approach set a precedent whereby those from more affluent backgrounds enjoyed preferential repayment conditions on loan debt. However, given that those from the poorest backgrounds are most likely to lose out without an urgent expansion of places, this is an acceptable short-term fix.”