Money saving expert considering challenging the government over student loans

Money saving expert Martin Lewis has hired a team of legal experts to look into whether it will be possible to challenge the new rules around student loan repayments.

Chancellor George Osborne announced that he was freezing the level graduates pay back their debt at £21,000 in his Autumn Statement.

It had been promised the level would rise in line with average earnings.

Mr Lewis describes this change as a "disgrace".

"No commercial company would be allowed to do it - the government shouldn't be allowed to either," he says on his website.

He's hired solicitors to look into whether it can be challenged or not.

In an example on his blog, Mr Lewis says: "If you earn £22,000 and the threshold had increased to £22,000, you'd have repaid nothing. But with it at £21,000 you'd repay £90 a year."

He says the way the repayment is structured means it will affect low or mid-range staff more.

"How can I, to so many people, in good conscience explain student loans if the government is prepared to change students' terms after they've signed up, in some cases after they've graduated," he says.

"In a personal capacity I've engaged the solicitors Bindmans to investigate if there are grounds to judicial review this decision and to look at other legal grounds to challenge it (it may be people with student loans will need to agree to take cases - I doubt there'll be a shortage of volunteers)."

The £21,000 limit was planned to be increased in line with earnings from 2017 but it will now be fixed until April 2021.

The new plan is set "to reduce government debt" and bring in £360m per year by 2020-21.

The threshold changes affect borrowers under the system introduced by England and Wales from September 2012.

Mr Lewis acknowledges there may be no basis to a legal challenge.

"My view (and it may be nonsense hence why I'm engaging lawyers) is there are many areas of weakness in this announcement - primarily that this is an unfair change in contractual terms for students, one no commercial company would've been allowed to do," he explains.

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