UNIVERSITY graduates will be left thousands of pounds deeper in debt because of a Government “stealth cut” in student loans, the TUC claimed.

The union organisation worked out that keeping the interest rate on loans based on RPI inflation, rather than the CPI measure, will add £4,800 to someone with a loan of £25,000 and on an average graduate salary.

Graduates with higher debt, lower earnings growth or broken careers to look after children will pay an even greater amount, said the TUC.

With tuition fees set to treble to £9,000 and the cost of student loans rising, sticking with RPI will cost students thousands of pounds, it was claimed.

General Secretary Brendan Barber said: “The Government claims that CPI is a better way to uprate benefits and pensions, but ministers’ refusal to extend the CPI switch to student loans proves the change is simply a sneaky way to cut benefits, tax credits and pensions, and to get more people to pay a higher tax rate.”

A spokesman from the Department for Business, Innovation and Skills said: “Historically, RPI has always been used for calculating interest on student loans, meaning that the rate of interest has been consistently applied.”