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Criticism Meets British Proposal to Penalize Early Repayment of Student Loans

September 9, 2011, 2:02 pm

The British government’s proposal to penalize university graduates who pay off their government-backed student loans early has been criticized by a liberal think tank, which says the plan “would clearly add complexity and cost, and would raise little revenue.”

Tuition at most universities in England is set to rise next year to as much as £9,000, or $14,380, but under the new system students will not be required to pay tuition up front and will have to begin paying back their loans only when their annual income exceeds £21,000, or $33,550. The repayment rate will depend on the graduate’s salary.

Because of concerns that high earners will be able to avoid paying the increased rate of interest by paying back their loans early, the government is considering early-redemption penalties for high earners or large repayments, or both, according to a report from CentreForum. It concludes that because the sum raised by the proposals “would be small relative to the costs,” and because “many rich people bypass the student-loan system in its entirety” by paying tuition up front, the government should abandon its plan.

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  • arrive2__net

    A diligent student does get organized, and using this site would teach them a form of taking intiative. However the users and/or organizers, in effect, take credit for errors in the information on the website if the error ends up hurting students’ grades. The prof for the class ought to be granted automatic access to the course web so he or she can see all in on the up-and-up, but the prof should not be required to make input.

    Bernard Schuster
    Arrive2.net
    Twitter.com/arrive2_net

  • bclemes1

    Anything that helps students take responsibity for their own learning sounds great to me!

  • http://twitter.com/Huzaifa47 Huzaifa Saeed

    ooo boy.

  • chroniclebarnacle

    I like the idea of a greater level of student buy-in with regard to managing their course work but I am leery of what sounds like a case of the “inmates running the prison” as it were. Sorry for the analogy. I am not in favor of yet one more thing to learn and monitor unless I can drop off some committee work to keep my hours down to 50 per week. I would be interested in seeing how the students would organize the course and in fact, this article has given me the idea to ask my class how they would organize my content! Food for thought.

  • emschles

    wonderful idea. see http://thehigheredcloud.com or studentforce.com for more information.

  • danhlawrence

    @chroniclebarnacle, why would a prof even need to monitor? Students need a place to gather and discuss the course, the content, even the instructor. And they do this, with or without an online tool. Grad students interested in becoming scholars debate at coffee shops–like cute little baby lions honing their hunting and fighting instincts through play–in order to test their ideas, share their thoughts. Undergrads that will actually go into the workforce need to improve their own skills and can do so by learning from the good (or bad) habits of others. This is a great format to hone their organizational abilities. And bonus, it’s happening in a social setting, where these skills will translate to emergent “real world” communications structures.

  • http://www.collegehumor.com/picture:1944207 hoohah

    > “…choosing an owl as its mascot rather than Stanford’s Cardinal, risks alienating their student base…”

    Yes, well, that would only alienate students that don’t know that for about the last 30 years “cardinal” refers to the color, not the bird.

  • 11134078

    Here is a quote from Hansard (in 2001) that says something we need to know about this: “The Minister of State, Department of Health (Mr. John Hutton):I am afraid that that confirms that the modern Conservative party is the stupid party of British politics. Hansard 9 Jan 2001.h ttp://www.publications.parliament.uk/pa/cm200001/cmhansrd/vo010109/debtext/1″ Mr. Hutton did not say that the Conservative Party actively promotes ignorance, but we are at liberty to add that obvious thought.

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