Make interest on student loan repayments tax deductible.

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Petition Action

Make interest on student loan repayments tax deductible.

Petition Details

Currently, the interest we pay on student loans is not tax deductible. Every year, 6.1% interest is charged on our student loan balance. Assuming we finish university £40,000 in debt, we have £2,440 a year of interest payments to make before we are even able to reduce our principal balance.

Additional Information

Under the current system, you would have to earn about £52,111 just to be able to pay every year the interest on your balance (assuming you have £40,000 debt). The government then charges you 40% tax on your interest payment, costing you £976 a year. Assuming you earn £52,111; you are paying the government £3,416 (976+2440) a year for borrowing their money (without decreasing your balance). Corporation have tax-deduction on their interest payments, so should students.

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