Monday, 20 May 2013
Why inflict RPI on students?
Further to Jeff Prestridge's piece suggesting that the vast majority of students will never be able to pay off their loans...
Let's ask again: Why is the interest rate on these loans now set at RPI plus 3%?
RPI is the retail prices index. Some people like it, some don't.
But the point is that it's usually higher than the other measure of inflation, CPI.
And the authorities have done their best to discredit it.
And the measure used to calculate increases in benefits and public sector pensions has been switched from RPI to CPI.
Remember what the National Statistician said on 10th January when she rubbished RPI:
"the formula used to produce the RPI does not meet international standards"
and "the arithmetic formulation [of the RPI] would not be chosen were ONS constructing a new price index"
The UK Statistics Authority agreed, saying "the current formulation of the RPI fails to meet international standards"
and on 14th March "RPI statistics will no longer be designated as National Statistics".
If there's a decent explanation for carrying on inflicting RPI on students, let's hear it.