News release: VC warns of danger of rise in debt costs

Abstract

Malcolm McVicar, Vice-Chancellor of the University of Central Lancashire has added
his voice to the concerns expressed about recent news reports of an increase in the
interest rate on student loans. Latest figures for the 2001/02 academic year, produced
by the Student Loans Company show that around 81% of eligible students took out an
official loan.
From September, the rate is due to rise from 1.3% to 3.1 %, which represents an increase
of 138%, bringing the rate closer to the current bank rate. Under the present system
graduates start to repay their loans once they are earning at least £10,000 a year. Under
the government's proposed reforms of the English education system, that threshold
would rise to £15,000 from 2006.
The University of Central Lancashire has an excellent track record in recruiting students
from lower socio-economic groups and believes strongly that high standards in
academic studies can exist alongside very broad participation. Dr McVicar is
concerned that further rises in the cost of student debt may prove off-putting to many of
these students who have the ability and the potential, but need extra encouragement to
go to university.
"University education provides an excellent investment for individuals and society. It is
important that all who can benefit from participation in higher education are given the
opportunity and are helped to do so. I am very surprised at any increase in the interest
payable on student loans - this is a backwards step and will add to the financial
pressures on students, particularly on those who are most hard-pressed."
4 August 2003
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Photo attached: Dr Malcolm Me Vicar