loans

i have not been following the student loan debate. 

i confess that my sympathy for the students withered when they rioted at milbank, nor have the subsequent actions helped their cause as far as i am concerned.

i feel a little guilty over this, if only because i was one of the lucky ones to get a grant to do my degree.

if the coalition is to be believed (which i know is a pretty hard thing to swallow), an awful lot of students will be better off under the new system. they will not have to pay up front fees and they won’t start paying until they start earning £21,000 a year.

during the run up to the vote the coalition was often heard to say that not all students would pay back the full amount.

that always sounded odd to me.

now the independent are saying that they have seen a report, which states that the coalition is only expect 25% of graduates to pay back the full amount of their loan.  while 60% will never pay back in full.

now i am no math genius, it seems to me that a system that results in just 25% of full payments is inherently flawed.

if i have understood it all the basic idea is as follows: universities need more cash in order to improve, the ‘fairest’ way to do this is to allow them to charge more for tuition and as students are responsible for tuition fees then all is well.

or it would be if the students were going to be paying it all back, but if the coalition is saying only 25% are going to be paying back then it means that the universities are going to be losing out on all those unpaid loans.

the students are going to be lumbered with debt.

it doesn’t seem to make economic sense – if the universities need more funding then they need that money to be paid back, so a default rate of over 50% just means they are going to be short of cash.

it doesn’t seem to make much educational sense – if the fees are too high fewer people are likely to opt for university. fewer students less cash for the universities, less brains to create economic wealth.

the only way it makes sense is if this is an ideological attack on the education system, where access to university is limited only to the rich. not that the conservatives would ever do such a thing.

my solution? increase the fees less and make sure that you get the repayment rate closer to 90%.  and just to add in my own little ideological twist – if you have been at a fee paying school, then you don’t need a loan, you can pay the full whack each term when you at university.