Scrap student loan interest and extend payback time – review

The BBC reports that scrapping interest on student loans and extending the time limit on paying it back could help to avoid a future debt crisis, a centre-right think tank says. The UK 2020 report said the measures would “bring down costs” for students and graduates.

Changing payback time limits from 30 to 50 years could also save billions of pounds of taxpayers’ money, it said.

Ministers are reviewing the student finance system. They said sustainable university funding was a priority.

In a report submitted as part of the review, UK 2020 is proposing that interest on all student loans – typically 6% a year – should be scrapped, This would reduce unpaid student debt by an average of 10%, it said.

Combining that with pushing back the current 30-year limit on debt repayment to retirement age would, the report says, increase the number of loans recovered from 25% at present to 80%, benefiting both graduates and taxpayers.

The report, co-authored by businessman and Leave.EU co-funder Richard Tice, says the current system threatens a student loan debt crisis in the mid-2020s.

In the report’s foreword, former education minister and the architect of tuition fees, Lord Adonis, welcomed the “innovative contribution” to ideas on student funding.

Read more Scrap student loan interest and extend payback time – review

Would you want to be paying back a student loan for 5o years? Please tell us your thoughts in comments or via Twitter ~ Tamsin

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