Wealthy graduates win from Labour's student fee scrap, think-tank claims

Helen Cahill
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Graduates start paying off their loan when they are earning over £21,000 (Source: Getty)

Wealthy graduates would be the overwhelming winners from Labour's policy to scrap tuition fees, a leading think-tank has said.

A report from the Centre for Policy Studies has argued scrapping student fees and writing off student debt would be "highly regressive" because it would require non-graduates to subsidise graduates, who, on average, earn £9,500 a year more.

"Jeremy Corbyn is effectively proposing to shift the burden of high education almost wholly onto the taxpayers and away from the individual," the think-tank said.

Read more: Labour "ambition" to clear student debt would cost £100bn, Rayner admits

"Corbyn's proposal to remove tuition fees for those attending university and ask the taxpayer to pay instead is, in effect, a subsidy from the less wealthy to the wealthier."

The Labour party promised to abolish student fees during the election campaign, and, in an interview with music magazine NME, Corbyn hinted he would also write off the student debt pile. He said he wanted to "reduce" the debt burden faced by current graduates.

However, shadow education secretary Angela Rayner later appeared to row back on Labour's position, saying it was only an "ambition" to clear the £100bn student debt burden.

The Centre for Policy Studies today pressed ministers to avoid taking any retrospective measures that would increase graduates' repayments, and said the government should look at how to bolster universities in areas with labour shortages.

Interest rates on student loans could also be reduced as a way to ameliorate the burden of payments, the centre-right think tank said.

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