If it were up to me, I’d just replace the whole loan system. Make it a tax contribution, and have education free for all.
I’d be fine even if it’s only those who continue further education who pay the contribution once they earn over a certain threshold.
The promise of a degree is a better paying job. If it fulfils that promise, pay 10% of your earnings above whatever the threshold is. If you don’t, then you don’t pay.
Which is sort of how it currently works, except since it’s a loan, it’s possible to fully repay back, and it does mean some will invariably pay more on interest than others, but I don’t think that’s as simple as a class problem.
But yeah, I don’t think it’s helpful or necessarily accurate to really look on them as loans. That just scares people and then they overthink it, or avoid it so they’re not stuck with debt.
It’s this that really drives that point home though:
- Student loan & interest: £20,000. Your earnings: £37,295.
As you repay 9% of everything above £27,295 your annual repayment is £900.
- Student loan & interest: £50,000. Your earnings: £37,295.
As you repay 9% of everything above £27,295 your annual repayment is £900.
- To get silly to prove a point: student loan & interest: £1 billion. Your earnings: £37,295.
As you repay 9% of everything above £27,295 your annual repayment is £900.
The bottom line is, if your qualification does it’s job, and you’re paying more back as a result, I’d be very happy with that outcome, and would see that as money well spent. Even on the lower end.