The government's proposed solution to fund a reduction in NHS waiting lists by freezing the repayment threshold for student loans appears to be a case of "tax by stealth." The current system, which sees graduates repay their loans at an increasingly high rate as they earn more, has been likened to a targeted tax rise on young people.
The problem with this approach is that it treats student debts like taxes, rather than the private contract that they are. Freezing the repayment threshold would penalize graduates by delaying when they start repaying their loans, essentially forcing them to pay more as they earn higher wages.
This policy change has been met with opposition from financial expert Martin Lewis, who argues that it is unfair and unreasonable. He points out that it's like asking students to gamble on how much tax rate they'll face in the future, rather than being taxed based on their earnings.
The issue at hand is not just about the impact on graduates, but also about the broader economy. A large cohort of working-age graduates now faces debts that older generations escaped, with many struggling to make ends meet. The fact that wealthy families can afford to pay for their children's education upfront while ordinary households see wages disappear into "charges" highlights the unfairness of the current system.
The government could fund public services through broad, progressive taxation or use the state's balance sheet to invest and run higher deficits. These options are honest and would address the root causes of the problem. Instead, they seem to be evading their responsibility by extracting cash from one generation via the student loan system.
Ultimately, this policy change is a case of tax by stealth, and its economic impact is meaningless. Politically, it's becoming increasingly indefensible as a way to fund public services. The government needs to take a more honest approach to addressing the issue of student debt and find a solution that benefits everyone, rather than just passing the burden on to future generations.
The problem with this approach is that it treats student debts like taxes, rather than the private contract that they are. Freezing the repayment threshold would penalize graduates by delaying when they start repaying their loans, essentially forcing them to pay more as they earn higher wages.
This policy change has been met with opposition from financial expert Martin Lewis, who argues that it is unfair and unreasonable. He points out that it's like asking students to gamble on how much tax rate they'll face in the future, rather than being taxed based on their earnings.
The issue at hand is not just about the impact on graduates, but also about the broader economy. A large cohort of working-age graduates now faces debts that older generations escaped, with many struggling to make ends meet. The fact that wealthy families can afford to pay for their children's education upfront while ordinary households see wages disappear into "charges" highlights the unfairness of the current system.
The government could fund public services through broad, progressive taxation or use the state's balance sheet to invest and run higher deficits. These options are honest and would address the root causes of the problem. Instead, they seem to be evading their responsibility by extracting cash from one generation via the student loan system.
Ultimately, this policy change is a case of tax by stealth, and its economic impact is meaningless. Politically, it's becoming increasingly indefensible as a way to fund public services. The government needs to take a more honest approach to addressing the issue of student debt and find a solution that benefits everyone, rather than just passing the burden on to future generations.
the system is already unfair, with grads facing massive debt and struggling to make ends meet, so why should we expect them to be responsible for a tax rate that might change in the future? 
it's time for the government to think about broadening its taxation base or using the state's balance sheet to invest, rather than relying on this sneaky approach that just shifts the burden to future generations 
I mean, we all know how student loans work - you take out money for education and then pay it back later... but freezing the repayment threshold does feel like a bit of a sneaky move. 
And yeah, I totally get why Martin Lewis and others are opposed - it feels like the government's just passing the burden on to future generations. Maybe they should think about how this policy change will affect people in 10-20 years' time? 
Would that be any better than what we're seeing now? 
. It's like they're trying to trick young people into paying more by not telling them how much they'll have to shell out when they start earning a decent income 
. Can't they just come up with a more transparent and fair way to fund public services? It's not like we're asking for the moon here 
I cant believe they wanna tax gradz like this!!! They're trying 2 pass the buck by changing the repayment threshold but it's stil gonna affect em in the long run. It's not fair at all! They should jus be transparent about how much they need and ask for that instead of freezing the threshold 
. We need a more honest approach 2 address student debt, not jus 1 that penalizes gradz and makes it harder 4 them 2 get on their feet 
I mean, what's next? Are they gonna tax us on our avocado toast or something 
? 
maybe a fairer system would be to tax the rich or corporations who can afford it 
. It's not that complicated!
.
. I swear, it's like they're taxing us without representation? The gov is gonna have a major problem if this policy goes through...
. Freezing the repayment threshold would be like putting a big weight 
on graduates' shoulders. It's not fair to ask them to delay paying back their loans just because the government wants to cut costs 
. The government should be exploring ways to make public services more affordable 
, like broad, progressive taxation or using the state's balance sheet 
.
, and it's not going to fix anything 
. It's just passing the burden on to future generations, which isn't fair 
. The government needs to come up with a better solution that benefits everyone 
...