Graham has backed A New Deal for Young People, supporting a clear plan to end the student loan debt treadmill, expand apprenticeships and help more young people into real work.
It comes as youth unemployment has reached its highest level in a decade according to the Office for National Statistics, graduate recruitment has fallen to record lows and too many young people are moving from education straight into welfare.
The New Deal is designed to reset the deal between the country and its young people. It would:
- Cap student loan interest at inflation, and no higher, so balances never rise faster than the cost of living
- Abolish real interest rates on Plan 2 loans to end the debt treadmill facing graduates
- Introduce an Apprenticeships Guarantee by lifting funding caps so employers can take on more 18 to 21 year olds
- Provide up to £5,000 in support for businesses hiring young apprentices
- Create a £5,000 First Job Bonus, with National Insurance contributions from a young person’s first job placed into a personal savings account for a home deposit or future security
- Redirect funding from low-quality degree courses into jobs, apprenticeships and practical training.
Under the current system, research shows a graduate would need to earn around £66,000 a year just to stop their loan growing faster than the interest added to it.
On Tuesday, Graham raised the issue directly in Parliament on behalf of Sammi from Keyingham. Sammi borrowed £40,000 to train. Her balance now stands at £46,000. She has worked in medicine for four years. Yet despite doing exactly what the system asked of her, her debt continues to grow.
During the exchange, the minister, Josh McAllister, chose to use the question as an opportunity to make party-political points rather than address the substance of Sammi’s case.
Since launching his petition last week calling for student loan interest to be capped at inflation, more than 1,200 people have already signed.
Graham has already been campaigning locally for better routes into work, including launching a First Jobs survey and pressing the Government to remove barriers that discourage businesses from hiring young people.
He said the New Deal for Young People builds on that work and forms part of his wider focus on backing local businesses, strengthening skills and delivering a record of real results for Beverley and Holderness.
Graham said:
“Young people who do the right thing should not see their debt grow while they are repaying it. That is wrong in principle.
“But this is bigger than student loans. Whether a young person chooses university or an apprenticeship, the system should reward work, training and responsibility.
“We need to cap interest at inflation, expand apprenticeships and back first jobs so young people can build savings and build a life.
“This is about restoring a fair deal for the next generation and delivering real routes into work.
“This is too serious for playing politics. Young people deserve action.”
