Choices for decreasing the rate of interest on student education loans and reintroducing maintenance grants

Choices for decreasing the rate of interest on student education loans and reintroducing maintenance grants

In October, the Prime Minister called for an inquiry to the education loan system for greater training (HE). In this briefing note, we concentrate on two for the more unpopular options that come with the present system. We explore government alternatives for decreasing the interest levels charged on figuratively speaking, from the present degrees of RPI + 3% while learning and RPI + 0–3% (dependent on earnings) after leaving college, as well as for reintroducing living-cost grants – which don’t need to be repaid – for students from lower-income families. This briefing note shall be submitted as proof when it comes to inquiry.

Key findings

  • Good genuine rates of interest on student loans boost the financial obligation degrees of all graduates but only raise the life time repayments of higher-earning graduates. Getting rid of them doesn’t impact up-front federal federal government spending on HE, nonetheless it does somewhat raise the deficit (because of the slightly confusing treatment of great interest accrued on pupil financial obligation into the federal government funds). Continue Reading