Student loans: Will it soon be pay-back time?

By Anna Fazackerley. Heads of universities are lobbying the government to alter student loans as a way to limit cuts. Students may have assumed the arguments about the new fee system were done and dusted. But as the axe looms over government funding for universities, senior academics are lobbying the government for graduates to start paying back their loans much earlier to cut public costs. Universities have already suffered severe cuts to their government funding for teaching and capital. Most are braced for further reductions when George Osborne unveils his comprehensive spending review on 26 June. Yet vice-chancellors warn that there are few pots of money left to raid, and further scything of the universities budget could seriously threaten the quality of teaching and science. Although none is keen to say so publicly yet, some vice-chancellors see changing the student finance arrangements as a fairly painless way of absorbing cuts. Backing them up is Nicholas Barr, professor of public economics at the London School of Economics and one of the leading experts on student loans. This, he argues, is a no-brainer. At present, graduates have to start repaying their loans when they earn £21,000 or more, but Barr is adamant that this should drop to £18,000. Read more...