by Ruth Nicolas
A new White Paper has reversed the government’s previous scheme to penalise any university students to pay back their student loan early. This is good news for students who will be hit by the £9,000 as the interest on their debt could rise to up to £12,000.
Fees rise again
Earlier this year the government revealed that the average cost for going to university next year will be £8,500 - £1000 more than the promised £7,500 average. This new development is in contrast to the government’s earlier pledge that most universities would only be able to charge the minimum fees of £6,000 and that any universities wishing to charge the full £9,000 would have to provide sufficient reasons as to why they should be able to charge this sum.
Many believe that the newly raised fees are the cause of the government’s reversal of their policies against early repayment of student debts. The new policy would alleviate the state funding hole that will arise due to the huge amount of debt.
Minister for universities and science, David Willetts, had told universities that if enough requested permission to charge the full £9,000 then there would have to be cuts in funding for research and teaching, as the high fees will cause a gap in public funding.
Social inequality
The new government proposals have attracted many critics who claim that they will increase social equality even further as less wealthy students will be unable to pay off their debt before accumulating huge amounts of interest, whereas students with rich parents can repay their debt quickly.
If you do not want your child to be saddled with huge amounts of debt after university good options for saving are the Shepherds Friendly Young Saver Plan and the Foresters Friendly Child Tax Exempt Savings Plan.
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