Should the total amount graduates repay be limited relative to the initial sum borrowed?
UK student loans are repaid at 9% of income above an annual threshold (currently £29,385 for Plan 2). Interest is charged (capped at 6% for Plan 2 in 2026/27) and unpaid balances are written off after 30 or 40 years. Many graduates, especially lower earners, repay less than borrowed in real terms while higher earners repay substantially more. Recent government action capped interest rates but froze thresholds, prompting calls for further reform including total repayment limits.
2 Opinions
The UK student loan system is state sponsored loan sharking. Slapping compound interest on top of a 9% tax surcharge means hard working grads pay more whilst the super rich pay upfront and dodge it entirely. It’s basically a lifetime fine on social mobility
No, the loans should become fully commercial, work more on the market rules. It is someone's risk to borrow money to improve his knowledge and chances for better live. Maybe it would limited a bit all these silly studies of nothing.