Proposed Increasing Student Loan Threshold Legislative Competence Order

Bethan Jenkins

Pre-ballot Information: Outline Proposed Legislative Competence Order

Outline of proposed Order

Provision to increase the student loan threshold upon which graduates commence repayment of loans under the Student Loan Scheme.

This Order will require amendment of Schedule 5, Field 5 of the Government of Wales Act 2006.

Pre-ballot Information: Explanatory Memorandum

Policy Objectives of the Proposed Order

Under current provisions graduates repay the student loan through 9% extra income tax on all earning above £15,000. In order to pay just the interest, the graduate will have to earn £21,671.99 (with an interest rate of 3.2%) It will therefore be necessary to start earning above that rate to start paying off the debt.

A survey by the Association of Graduate Recruiters has shown that graduate salaries in Wales are amongst the lowest in the UK. The average amount in the UK is £22,000. In addition, consideration must be given to the huge prices rises in housing, energy and transport which result in much lower disposable incomes for young people than might be apparent from their salaries.

In 2005, the threshold was increased from £10,000 to £15,000. However, the current situation leaves students in a situation of increasing debt for many years.

Support has been received on this Order by the NUS.