Tuition fees

Ed Miliband’s pledge to cut student tuition fees from £9k to £6k is nonsensical.

Student loans in the UK are not real debt and should not be thought of as ‘debt’. You pay back x% of your income over a certain amount, and it gets wiped after y years. For most people, the repayment rate is so low and the loan so big that they will pay back a small amount of money for their entire working life, or until y years have passed. They will never repay the whole amount. It more resembles a tax than a debt and should be thought of as such.

Cutting the fees to £6k will mean that high earners pay off their debt sooner and thus no longer pay the tax. Medium and low earners will still never fully repay their debt, so they will pay back exactly the same amount of money whether the fees are £6k, £9k or £100000k. It does not make sense to cut fees in this manner because it just means a tax cut for high earners, i.e. the people who need a tax cut the least.

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