Middle-class women face unfair tuition fees burden: Squeezed graduates face paying more than highly-paid peers or low earners



Women face the heaviest burden because they earn less than men



Taking longer to pay off debts exposes them to more interest payments

A ‘squeezed middle’ of graduates will end up paying far more for their student loans than highly paid peers or low earners, a study shows.



And women face the heaviest burden because they earn less than men on average and will take longer to pay off their debt, exposing them to more interest payments.



The ‘inequitable’ situation was discovered by an academic using the government repayment calculator.



Inequitable situation : Female graduates earn less than men on average and will take longer to pay off their debt, exposing them to more interest payments

Professor Ron Johnston, of the University of Bristol, found students who finish university owing £50,000 would repay £115,807 over 19 years, based on a starting salary of £35,000.



But a graduate who begins a job earning £25,000 would end up paying £159,899 over 30 years – with £26,664 waived as loans are written off after three decades.

Some students would never have to pay a penny back as repayments are not triggered unless annual earnings are more than £21,000.



Students from better-off families who fail to qualify for grants at university and then go on to work in modestly paid jobs would therefore be worst affected.



Professor Johnston warned women would face the highest repayments, as their salaries are usually lower than those of men with the same qualifications in the same jobs.



In banking, finance and insurance, for example, women’s starting salaries are around £22,500 compared to £29,000 for men.



In banking, finance and insurance women¿s starting salaries are around £22,500 compared to £29,000 for men

Based on a debt of £43,500, the woman would repay £131,416 over 30 years, after which £31,796 would be written off.



But male peers would pay £109,766 and be debt free after 21 years and ten months. ‘This seems both counter-intuitive and inequitable,’ said Professor Johnston, from Bristol’s School of Geographical Sciences.



‘Most welfare state systems are based on the principle that those who gain most from the state’s largesse should repay more – from each according to his ability, to each according to his need.



‘The Government’s system will protect the poorly paid, those with high incomes will soon clear their debts and the losers will be those in the “squeezed middle”.’



The disparity in loans affects students currently graduating having paid annual fees of around £3,000. But the issue will become even more pronounced from 2016, when the first students paying up to £9,000 per year graduate.



Professor Johnston, whose research appears in the The Political Quarterly, added: ‘Come the 2015 election, it will be about the time repayments are going to start and people will begin to realise what they mean.



‘Parties may have to think whether, if they want to go on charging fees, they ought to make the system fairer.’



The trebling of fees was introduced by the Coalition as it looked for ways to reduce the crippling national debt left by Labour. It was particularly damaging for the Liberal Democrats, who had pledged not to increase fees.



Under the loans system, interest is charged at 3 per cent over inflation while a student is at university.



The debt then grows at an inflation-only rate as long as the graduate earns less than £21,000.



They must pay 9 per cent of any income over that figure and the interest increases in stages up to a maximum of inflation plus 3 per cent with salaries over £41,000.



Professor Johnston suggested the financial burden could be shared more fairly if the highest earners paid more interest.



A spokesman at the Department for Business, Innovation and Skills said: ‘Repayments are lower than in the past for all graduates.

