Martin Lewis: How finance expert’s forensic tuition fee analysis stunned Labour MP

Labour’s Chi Onwurah was locked in an argument with Martin Lewis on whether tuition fees for university study was locking working class people out of higher education. Mr Lewis has explained in the past exactly how the student finance system works, and has argued that it is not a conventional “debt” but a form of increased taxation post-studies. In numerous articles published in January on the Money Saving Expert website, he “busted the myths” of tuition fees.

As the finance expert highlights, once you leave university, you only repay when you’re earning above £26,575 a year, as of April 2020.

Then it is fixed at nine percent of everything you earn above that.

He adds that for example, if you earn £27,000 a year, you would pay back £115, as £27,000 is £1,275 above the threshold and nine percent of £1,275 is £115.

Mr Lewis then addresses the “panicked question” of whether some children can afford to go to higher education.

He says: “‘How on earth will my child be able to afford to repay these debts if they get a poorly paying job?’

“This panicked question has been thrown at me by many parents – and it’s really important to examine it in the light of the required repayments.

“Someone on a low wage will be required to repay little or nothing at all. In fact, only higher earners will be shelling out large amounts.

“It’s important to note that not repaying much because you’re just over the threshold isn’t being bad.

“The system is, in reality, a graduate contribution, designed so that, in the main, those who gain the most financially out of university contribute the most.”

On the Telegraph’s It’s Your Money podcast in 2019, the journalist showed how “it doesn’t matter if your student loan is £30,000 or £3million.

He said that given that it is better described as a graduate contribution scheme, “the amount you borrow is a complete irrelevance”.

This issue led to a furious debate between Mr Lewis and Labour MP Ms Onwurah.

She claimed on BBC Question Time in 2018 that “If somebody, particularly from a working class background, has £57,000 in debt…”

Mr Lewis then interrupted saying: “No, no don’t tell them.

“Look politicians do this all the time and you’re making your political points and you’re doing it and you put off young people from underprivileged backgrounds going to university with a fear of debt by framing it a a debt when you know it doesn’t work like that.”

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Mr Lewis then attacked the “political football” being played by politicians of all parties and blamed her for being part of a movement that has “miseducated a generation”.

He went on: “Politicians need to take responsibility, your political football that the way you and all the parties have used student finance has misled a generation about how student finance works and it is an abomination – you should all hang your heads in shame.

“There are people from poor backgrounds on television, I saw a programme two weeks ago saying ‘I can’t afford to go to university’.

“Well you know what it is expensive, it’s an increased form of taxation when you leave but it is not framed as a debt, it should not be called a debt.

“It’s a graduate contribution system so don’t even go there, don’t even go there.”

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