Independent analysis shows Lib Dems offer best deal for students

24.3.05

The Institute for Fiscal Studies' (IFS) has released an analysis of the three parties' policies for higher education, which confirm university graduates will face the least debt under Liberal Democrat proposals.

Edward Davey, Liberal Democrat MP for Kingston and Surbiton, commented

'The IFS is an internationally respected and independent body. Their seal of approval on Lib Dem plans for students means a great deal.

'I know from talking to young people and students in Kingston that graduate debt is a genuine concern, and the prospect of paying back tuition fees and top-up fees are a real deterrent for many prospective students.

'The Conservative plans have been exposed as expensive for students and risky for lenders, whilst our proposals have passed with flying colours.

'This confirms what we have been saying all along. What is needed is a fair deal for students, and the Liberal Democrats are the only party who truly offer this.'

Liberal Democrat Shadow Education Secretary, Phil Willis MP, said

"Independent experts and young people at university are agreed - the Liberal Democrats offer the best deal to students."

The IFS report states:

To achieve the same standard of living while at university, graduates under the Liberal Democrats' scheme would on average take less time to repay their debts than under Labour or the Conservatives.

This is because:

o Debt on graduation would be lower under the Liberal Democrats compared to Labour, since there would be no need to borrow for fees.

o The positive real interest rate charged by banks under the Conservatives (up to 5.5%) would mean that the outstanding value of debt would go down by less each year as repayments were made than in the Liberal Democrat system, where the real rate of interest would be zero. Indeed outstanding debt could go up under the Conservatives for low earners, even as they repay.