Edinburgh Black Cat
Striker
Yes, but there's still the money the graduate has failed to pay back and that hole is still missing. The interest rates only ensure the loaned out money does not devalue in market terms. Given the Unis have headed towards top whack in their demands (if they looked at cutting waste, they wouldn't have to charge these ridiculous fees), there's going to be a considerable gap due to more graduates failing to pay back.
I don't see increased tax (on top of the loans) from increased wages being sufficient to cover this. Anyone care to do some maths on this?
As sad as this is I've just tested a few things on excel and made a chart based on the following:
Starting salary of £18,000
Student Loans debt of £25,000
Salary increase of 10% per annum for the first 5 years
Salary increase of 5% per annum beyond year 6.
Inflation of 4% per annum making the interest payable 7% per annum(i.e. inflation plus 3%)
I think the salary increases are fairly modest and if anyone wants to compare the results with different assumptions let me know, it'll only take 30 seconds to get a new chart.
Anyway, here's the one based on the above.
Logon or register to see this image
Last edited: