Our research, news, ratings, and assessments are scrutinized using strict editorial integrity. Our editorial staff does not receive direction from advertisers on our website. Learn more here.
Jeremy Corbyn, leader of the Labour Party and the Opposition in the United Kingdom, took back previous comments he has made regarding his intention to forgive all historic student loan debt in the country.
Speaking on the BBC’s Andrew Marr Show on Sunday, Corbyn said he neither promised nor committed to developing a policy that would forgive all student loan debt in the UK. He also told BBC that at the time of his previous remarks, the Labour Party was “unaware of the size of it [student loan debt] at the time.”
The amount of student loan debt in the UK is, in fact, quite large and continuing to grow. As previously reported by LendEDU, total student loan debt in the UK recently surged past £100 billion for the first time in the nation’s history. Many experts predict that number will rise to £1 trillion by 2035.
So, any forgiveness program suggested by Corbyn would cost the UK at least £100 billion. It is worth mentioning that at the time of Corbyn’s misleading pledge to forgive student debt, the Labour Party’s education spokeswoman, Angela Rayner, responded by saying the party would not move forward with such an idea until accurate projections could be made.
In speaking with BBC, Corbyn had the following to say, “I did not make a commitment we would write it off because I couldn’t at that stage. I pointed out we had written the manifesto in a short space of time because there was a surprise election but that we would look at ways of reducing that debt burden, recognising that a lot of it is never going to be collected anyway and try and reduce that.”
Members of the Conservative Party in the UK, the Labour’s opposition, have accused Corbyn of misleading students in an effort to gain support before a critical election. Many believe that pledges made by Corbyn, such as cancelling all previous student debt or scrapping tuition fees, were simply part of a plan to use students and younger UK citizens as “election fodder.”
Did it work? Many believe so.The Labour Party had a surprisingly large voter-turnout among students; additionally, the party won Canterbury for the first time in 100 years alongside increasing their majority in larger English cities.
The student loan debt situation in the UK, seemingly characterized by discord and disarray, has been extensively covered by LendEDU. One point of contention continues to be the 6.1 percent interest rate charged on student loans, which is quite high compared to other financial products offered in the UK. The Institute for Fiscal Studies (IFS) recently released a report that predicted the average UK student will soon owe more than £50,000 in student loans, largely due to the 6.1 percent interest rate.
On the heels of the IFS projection, lawmakers in the UK proposed raising the £21,000 graduate salary cap. That cap refers to the policy in the country in which student debtors must begin repayment once they begin earning more than £21,000.
Finally, LendEDU also covered a report released by the Student Loans Company. In the report, the Student Loans Company admitted that nearly 80,000 former foreign students who studied in the UK have left the country without paying back their student loan debt. It was estimated that the debt-dodgers owe the UK a collective £1.2 billion in student loan debt.
Author: Mike Brown
In his role at LendEDU, Mike uses data, usually from surveys and publicly-available resources, to identify emerging personal finance trends and tell unique stories. Mike’s work, featured in major outlets like The Wall Street Journal and The Washington Post, provides consumers with a personal finance measuring stick and can help them make informed finance decisions.