Scrap student loan interest and extend payback time

UK2020 report, 'Defusing the debt timebomb: A fair deal for students and the taxpayer' has claimed that getting rid of interest on student loans and extending the payback time from 30 to 50 years would bring down costs for students and graduates, avoiding a future debt crisis. [Source]

This comes as part of a review on the student finance system in England, after the PM's announcement that they would not go ahead with the scheduled increase in 2018.

What do you think?

Would this ease the financial pressure for students?

Would you be more likely to go to uni if you didn't have to worry about interest on your student loan and could take longer to pay it back?

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Reply 1

Snufkin

Universities Forum Helper

A money grab posing as HE policy.

I hope this report does not influence government policy, extending the repayment period is a terrible idea. It helps the Exchequer, nobody else. You can't create a market in HE, stop trying. The government should reinstate public funding for public universities (why should students have to carry the full cost of a degree themselves when it benefits society at large?) and bring back maintenance grants so that the poorest students aren't leaving university with the most debt.

Reply 2

avenue321

Original post by BlinkyBill

Scrap student loans altogether and give them grants instead. (But only to a small number of students).

Reply 3

Trinculo

The idea that graduates benefit society at large is such an arrogant and self-serving idea.

Some graduates benefit society - but the prime beneficiary is always the individual. The individual benefits far more than "society" - and we don't treat anyone else in the same way. Shops that sell food are essential for the country to function - but there is no sense that they should be taxpayer subsidised.

Large numbers of graduates don't benefit society in any meaningful sense at all. How do you separate those? I know a guy that graduated with a Zoology degree years ago and has never had a job. I know someone else with a degree in Materials Science - works as a postman. Why should non-graduate postmen pay for the free education of the graduate postman?

Reply 4

TheYearNiner

Original post by avenue321

Scrap student loans altogether and give them grants instead. (But only to a small number of students).

Then barely anyone will go to university and those who do will be in tons of debt or those from rich families

Reply 5

Taz554:-)

Original post by BlinkyBill

Personally i think this is an amazing idea as more people would not be getting scared or worked up about paying the loans back so soon into their chosen career. It would also give a sigh of relief for Muslim students who rely on non-interest based loans from other companies that are not affiliated with the government to pay off their loans and this would allow more Muslim students to go to university as interest based loans are not accepted in Islam and this stops many students from going to university.
As a Muslim myself, i don't even know whether I will be able to go to university at the moment and this would increase the likelihood of me going to university and it would ease off other students fear about paying the money off so soon and even allow to underprivileged people go to uni!!

Reply 6

avenue321

Original post by TheYearNiner

Then barely anyone will go to university and those who do will be in tons of debt or those from rich families

35 years ago, only 5% went to university and they paid nothing at all. They even got a means tested grant.

Reply 7

username853993

I am surprised something like this wasnt proposed sooner. I imagine lots of students will moan about this as, for the most part,they will end up paying more of their student loan back. It is a loan you take out so I dont see why people have a problem with being asked to pay it back, people will moan because they were told 'its okay it will be wiped off after 30 years and you wont have to pay a good amount of it back due to the repayment structure', if you choose to take out the loan you should accept that you might have to pay it all back, not just assume you wont.

Reply 8

Tiger Rag

Original post by avenue321

Scrap student loans altogether and give them grants instead. (But only to a small number of students).

And what about the students who want to go to uni, don't get the grants and don't have rich parents? or would you rather they were just on benefits for the rest of their life?

Reply 9

username853993

Original post by Tiger Rag

And what about the students who want to go to uni, don't get the grants and don't have rich parents? or would you rather they were just on benefits for the rest of their life?

While I agree with you point in the first bit the bit in bold is a stupid statement, that isnt the most likely out come of not going to university

Reply 10

Tiger Rag

Original post by madmadmax321

While I agree with you point in the first bit the bit in bold is a stupid statement, that isnt the most likely out come of not going to university

Well, thanks for ignoring my question.

Reply 11

username853993

Original post by Tiger Rag

Well, thanks for ignoring my question.

I will expand on what I said then.

1. The first question - I dont think money should be a barrier to entry at all, people should be given places based on merit alone. Funding or loans should be given to those who get offers from uni. (though there are way too many uni places now imo)

2.what you said about people who dont go to uni ending up on benefits - there are plenty of other routes to get into the industry you want to get into, for engineering, finance (well a lots of sectors of it anyway) software development etc there are plenty of apprenticeships (which can lead to getting a degree anyway) available that lead to similar roles to which grad schemes lead now, so people could do those, for a lot of art based jobs are offered based on a persons portfolio, not degree, so wouldnt stop people getting into those areas (for the most part). Or people just get a job/other apprenticeships straight out of school, there aren't that many people that dont go to uni that go straight onto benefits as there are plenty of other options to uni (and as stated above some of those options still allow you to get to a place a degree can get you, with exceptions of course)

(edited 6 years ago)

Reply 12

N/A IS THE NAME

But don’t they normally wipe off debts after a certain number of yrs???

Reply 13

username853993

Original post by N/A IS THE NAME

But don’t they normally wipe off debts after a certain number of yrs???

Yes they do, after 30 but they are suggesting raising that to 50 years (but also stop charging interest)

Reply 14

N/A IS THE NAME

Original post by madmadmax321

Yes they do, after 30 but they are suggesting raising that to 50 years (but also stop charging interest)

Lol forget that i rather them keep it the same. Coz u only pay a certain amount depending on how much u earn.

Reply 15

woodchuck

this is just another marketing ploy to screw students over. because of weak graduate earnings and the ridiculous interest rate, most will never pay back the loans.

they need to bring back caps on the numbers going to university, and increase grants / reduce the interest rate to just inflation. the current system has led to a situation where many degrees do not help the graduates at all.

the problem is that no-one is there to fight for the rights of students. universities are bloated and want as many people through the door to sustain their payrolls. firms like being able to have a large pool of graduates as they can be picky.

our parents got paid to go to university. we are not asking for anywhere near the same level of generosity, just reasonable fees (£3-5k), and a non punitive interest rate. there is seemingly money for corporate tax cuts, other tax breaks on the wealthy, and a triple lock on the state pension, so why not?

Reply 16

username853993

Original post by woodchuck

I wouldnt really say it is a way of screwing students over, its just a way of trying to make the students pay back what they BORROWED (which was agreed before starting uni), it doesnt seem that unfair in that sense (note I dont mean the fees per year is fair but that isnt just down to the government, unis choose to charge that amount)

Reply 17

MJlover

Original post by woodchuck

How would a cap on the numbers going to university work, if someone wants to attend university why should they be disallowed because of a quota?

I think education is a human right and not a privilege, so going to university should be seen as a positive thing generally and should not be made exclusive because of tax costs.

Reply 18

Yhimo

Original post by MJlover

Isn't taking out an interest based student loan haram? How do you think Allah would feel about you disobeying his command? Muslims are so quick to invoke god but not when doing so makes their lives harder lol.