A new report suggests the repayment period for student loans should be reduced by half and that employers hiring graduates should contribute to the cost of higher education through a national insurance surcharge. The report, authored by Tim Leunig, a former government adviser, calls for a 20-year repayment term instead of the current 40 years for student loans.
Leunig also proposes that graduate debt repayments remain fixed over time, avoiding increases even in nominal terms. The report advocates for a minimum repayment of £10 a week for all graduates, regardless of their earnings. Additionally, a 1% national insurance surcharge would be introduced for companies that employ graduates, ensuring that businesses share in the benefits of higher education.
Leunig also suggests allowing graduates to reduce pension contributions to increase student loan repayments and recommends the reintroduction of maintenance grants for disadvantaged students. He described his proposals as a "zero-cost reform package," which would provide more support for students, shorter repayment periods, and increased funding for universities.
Several experts have voiced their support for these changes, highlighting the need for a fairer student finance system. They argue that the current system disproportionately impacts students from low-income backgrounds, and the proposed reforms could help alleviate this issue by providing much-needed support during university studies.
