This is the way it works:
The government’s student loan reforms will benefit the country’s best-paid graduates at the expense of nursing graduates, teachers and other lower- and middle-income earners, new research reveals.
Under the biggest reforms of student loans in England for more than a decade, many lower-paid earners face an increase in their total lifetime repayments of more than £30,000. Meanwhile, the highest-earning graduates will see their lifetime repayments fall on average by £25,000 compared with the previous arrangements, according to an analysis by the economic consultancy London Economics.
The research forecasts that a graduate earning £37,000 by 2030 would pay back £63,100 over the course of their career, while a graduate earning £70,000 would pay back just £55,000.
If you task out a loan then the longer you take to pay it off the more you will pay in interest.
And?
Maybe not require nurses and teachers to be graduates, then?
To expand on Sam Duncan’s contribution, then the nursing graduates, teachers and other lower- and middle-income earners are obviously not benefiting from imposing a graduate requirement on entry to the professions. So why fucking impose it? Answer, it benefits the educational establishment.
Given their performances during The Pandemic we should be decimating teachers and nurses. That would mean higher pay for the new generation of same. Problem solved.
Teachers after a year or so of on the job training go onto the main pay scale. Starts at £28k a year, rising to 38 within 10 years. Plus extra responsibility fees of up to 10k a year and London weighting, 25% pension, etc.
As that is basic pay comfortably above national average wages before age 40, hardly accurate to describe them as low earners?
Life-time nominal-pound repayments are irrelevant. The meaningful measure is the present value of anticipated repayments, discounted either at a consumer-loan rate, or for shits & giggles, at some social cost of capital rate. From the fractured description, it looks like the interest rate charged is the RPI, so all the graduates are paying is the real-pound cost of their education over time. That’s still a fabulous deal, financially. On the whole, it is only a good deal if your degree actually adds value above its cost, as our host sets our above, but irrespective of that the financing aspect is extremely generous.
Obviously, the journos at the Graun are innumerate hacks pushing an agenda, but an economics consultancy deliberately using the wrong measure is either deeply incompetent (always possible) or also pushing an agenda. Or both, of course.