Some Lib Dem changes to the student loan fees have been scraped -
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Student Loan Changes

The Government had planned to impose a penalty on students who paid back their student loan early, however the Government has now dropped this idea, as fears grow that thousands of people would be landed with unfair charges.

The Government planned to put an annual charge of around 5% on overpayments.This would have prevented the 'better off' students being able to pay the loan off quicker and avoid paying as much on interest charges and repayments

It is believed David Cameron has put a stop to the proposal, first created by the Liberal Democrats.

A spokesman for Downing Street confirmed that the repayment penalties were no longer going to happen. "The consultation has now closed and we will come forward with our response shortly," he said.

As from September, students are able to take out loans to cover their annual tuition fees of up to £9,000. The loan will only start to be eligible for repayment when the person earns over £21,000 a year and after 30 years any balance left will be written off.

Lib Dem Proposal

This idea came from the Liberal Democrats and was named "graduate tax". The idea was that those who profited most from their university education would pay higher fees.

To prevent wealthier graduates opting out the scheme the idea was to fine them 5% of the value of early repayments.

Ministers are expected to formally announce next week that the plan has been axed, after consultation with the idea; the criticism arose for putting more financial burden on the already financially-squeezed middle classes.

Despite fierce Conservative opposition, it is thought that David Cameron helped eased the situation of rejection by allowing Vince Cable  to appoint Professor Les Ebdon as head of the Office for Fair Access.

"The Liberal Democrats were very keen to appoint Ebdon, and we felt very strongly about penalties for early repayment of loans. This is hopefully good news for tens of thousands of families, as well as many Conservative MPs who had raised concerns about the penalties," a spokesman for Downing Street said.

Some MPs want David Cameron to overrule Cable, as there is unrest over the appointment of Ebdon even though there has been a reversal on early repayment penalties.

"The scrapping of repayment penalties is very welcome but it's still not a great political deal as Ebdon has the potential to do real damage to our country's education system," one Conservative said.

Ebdon, vice chancellor of the University of Bedfordshire, has caused unrest amongst some due to his non-traditional ideas such as degrees in fashion design, or widening student intake at highly academic universities He has also threatened "nuclear option" to those universities that don't increase the number of student from poorer backgrounds..

 

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