THE Government’s U-turn on student loan repayment is a ‘betrayal of young people’ according to Warrington North MP, Helen Jones.

Student loans are paid back by graduates once they start earning more than £21,000 a year.

When the scheme was launched in 2012, the Government promised that from April 2017, the amount graduates have to earn before they start paying the loan back would increase in line with average earnings.

But the Government has now decided to freeze the repayment threshold at £21,000 and a petition to Government said that some graduates will end up paying £306 more per year by 2021 if they earn over £21,000.

Graduates in lower paid jobs will also be hit by the move as they will pay back a higher percentage of their income.

During a debate on the student loans agreement in the House of Commons, MP Helen Jones said: “This is a real betrayal of our young people.

“What the Government have done with student loans adds to that betrayal.

As in so many other matters these days, the Government are making young people pay the price for their failure.”

She said that the decision to freeze the threshold until 2021 was ‘buried’ on page 126 of the Budget Papers.

Ms Jones said that graduates are likely to rack up huge interest bills on their student loans thanks to the move: “Students are clocking up interest at such a rate that it is almost impossible for them to get a grip on what they owe.

“The Government expected such a move [to freeze the threshold] to generate an extra £3.2 billion over the lifetime of the loan.

“There we have it. The Government were not getting enough money in, so they resorted to that rather underhand tactic to get more.”

Ms Jones said the student loan system is in chaos and graduates face a number of problems including a lack of jobs, no hope of getting onto the housing ladder and becoming the first generation to earn less than their parents.